Texas All Lines Adjuster Test 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 420

Which type of loss is defined as physical loss or damage directly caused by an incident?

Indirect loss

Collateral loss

Direct loss

The correct answer identifies a direct loss as the type of loss characterized by physical damage or impairment directly resulting from an incident. This classification is crucial in insurance as it involves tangible, measurable damage to property, such as when a fire destroys a building or a car is damaged in an accident.

Understanding direct loss is essential for both adjusters and policyholders, as it pertains to claims that are straightforward in terms of determining coverage and compensation. In contrast, indirect losses are typically secondary effects, collateral losses refer to related but not directly caused damages, and market losses pertain to declines in asset value due to market forces rather than physical damage. Therefore, the focus on "direct" in this context directly relates to the immediate repercussions of an incident, aligning clearly with how losses are evaluated in an insurance framework.

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Market loss

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