Direct Loss
Definition of "Direct loss"
Property loss in which the insured peril is the proximate cause (an unbroken chain of events) of the damage or destruction. Most basic property insurance policies (such as the standard fire policy) insure against only direct loss and not indirect loss or consequential loss. For example, a fire within the wall structure of a house causes the drapes to catch fire, which in turn fans flames onto the furniture a direct loss. An indirect loss would be inconvenience of the inhabitants, who would not be able to sleep in their home, thus causing a drop in their efficiency at work.
Popular Insurance Terms
Total of operating income plus realized capital gains (losses) from investment and underwriting operations minus federal income taxes. ...
Type of excess of loss reinsurance in which the insurance company (cedent) cedes its risk of loss on incurred but not reported losses (IBNR) and previously reported losses. ...
Trust instrument that permits the owner of a residence (grantor) to transfer ownership of that residence with the grantor still being allowed to stay in that residence for a stipulated ...
Program instituted by the Small Business Administration (SBA) that guarantees a construction contract bond in the event the issuing surety company suffers a loss. This is an effort by the ...
Policy that provides coverage through four parts: Commercial property coverage is provided under the BUILDING AND PERSONAL PROPERTY COVERAGE FORM (BPPCF), divided into three major ...
Annuity in which premium payments are used to purchase accumulation units, their number depending on the value of each unit. The value of a unit is determined by the value of the portfolio ...
Liability insurance that extends beyond the end of the policy period of a liability insurance policy written on a claims-made basis. Liability claims are often made long after the accident ...
Legal right of a passenger in an automobile involved in an accident to bring a liability suit against the driver. It is deemed that a special standard of care is owed by an automobile ...
Series of payments made on either a FIXED DOLLAR ANNUITY basis or VARIABLE DOLLAR ANNUITY basis. ...
Have a question or comment?
We're here to help.