Texas All Lines Adjuster Practice Test

What is defined as physical harm to tangible property caused by a peril?

1. Indirect Loss

2. Direct Loss

3. Defamation

4. Deductible

The correct answer is: Direct Loss

The definition given in the question aligns with the concept of direct loss, which refers specifically to the physical damage inflicted on tangible property due to a peril such as fire, theft, or natural disaster. Direct loss is characterized by its immediate impact on property, where the loss is clear and quantifiable because it results in actual damage that necessitates repair or replacement. In contrast, indirect loss refers to the secondary impacts that arise from a direct loss, such as loss of income or additional expenses incurred due to the damage. Defamation pertains to a legal term related to damaging someone's reputation rather than property. A deductible is an amount that an insured must pay out of pocket before insurance coverage kicks in, and does not pertain directly to the nature of the loss itself. Thus, the emphasis on physical harm to tangible property makes direct loss the accurate answer in this context.