What term describes damage where the insured peril was the proximate cause of loss?

The term that describes damage where the insured peril was the proximate cause of loss is known as direct loss. This indicates a situation where the loss directly results from an event covered by the insurance policy, making it straightforward to establish a connection between the cause and the damage incurred.

For example, if a fire—an insured peril—damages a building, the resulting destruction is considered a direct loss because the fire directly caused the damage. The direct nature of this relationship is essential for claims processing in property and casualty insurance, as it helps insurers determine liability and coverage limits.

In contrast, indirect loss refers to secondary losses that can occur as a consequence of a direct loss, like loss of rental income due to property damage. Contingent loss typically involves losses that hinge on the occurrence of an event that may or may not happen, while accidental loss denotes losses that occur unexpectedly without intent. Understanding these distinctions is crucial in the context of insurance coverage and how claims are managed.