What defines a direct loss?

A direct loss is specifically defined as damage or destruction to property caused by a peril that is covered under an insurance policy. This refers to any physical harm that results from an event that is expressly outlined in the insurance agreement, such as fire, theft, or natural disasters. When an insured property suffers damage due to such an event, it is classified as a direct loss because the damage directly affects the physical condition of the property.

In this context, the other options do not define a direct loss as accurately. Injury to a person relates to bodily harm rather than property damage, which is outside the scope of what constitutes a direct loss for property insurance purposes. Economic losses experienced may refer to financial impacts resulting from a loss but do not directly address physical damage to the property itself. Lastly, while the loss of property value can be related to direct losses, it is not synonymous; property value can fluctuate due to various external factors that are not necessarily tied to direct physical damage caused by a covered peril. Therefore, the focus on damage by peril insured against accurately captures the essence of what a direct loss entails in the context of insurance claims.