What is defined as direct, physical damage to buildings and/or personal property?

Direct losses are defined as direct, physical damage to buildings and/or personal property. This concept refers to the immediate financial impact that occurs when property is damaged or destroyed due to a covered peril, such as fire, theft, or natural disasters. For example, if a storm damages a homeowner's roof or floods their basement, the costs incurred to repair that roof or clean up the flood would be categorized as direct losses.

This type of loss is crucial in insurance contexts since it directly affects the insured property and typically serves as the basis for claims made by policyholders. Understanding the distinction between direct losses and other types, such as indirect losses, which may relate to the loss of income or additional expenses incurred due to the damage, helps clarify how insurance policies are structured and how claims are evaluated.

In summary, the definition of direct losses aligns with the understanding of immediate physical damage to property, and it plays a vital role in assessing the coverage provided by insurance policies.