Property Insurance FundamentalsQuestion 227 of 474
A covered kitchen fire drives a family into a hotel for six weeks. Which part of that is the indirect loss?
a.The burned cabinets and scorched wall
b.The floor ruined by firefighting water
c.The smoke damage to the family's clothes
d.The hotel bills the family has run up
Explanation
Additional living expense is a consequential loss: the hotel bills are not physical damage, they are money the family spends because the damage made the home unfit to live in. Burned cabinets, smoke-damaged clothing and a water-soaked floor are all direct physical damage, whether the water came from the fire hose or the fire itself.
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Related questions on this topic
- Under a named-perils property form, who carries the burden of proof when a claim is filed?
- On an open-perils form, once the insured shows that direct physical loss occurred, the insurer must:
- The difference between a direct loss and an indirect or consequential loss is that the indirect loss is:
- Proximate cause, as property insurance uses the term, refers to:
- Firefighters put out a covered kitchen fire and their water ruins the ceiling of the room below. That ceiling damage is:
- Two policies with no conflicting other-insurance wording cover the same building. Pro rata sharing makes each insurer pay:
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