What is an example of indirect loss?

Indirect loss refers to the secondary or consequential financial impact that occurs as a result of a direct loss. In this context, the cost of dining out while a kitchen is being repaired exemplifies an indirect loss. This expense arises because the kitchen, a fundamental space in a home, cannot be used for its intended purpose during the repair process.

When a direct loss, such as damage or destruction of a property occurs, the direct costs are those immediately associated with repairing or replacing the property itself. However, indirect losses encompass additional expenses that stem from the disruption caused by the direct loss, like dining out instead of cooking at home. This reflects how an initial property alteration leads to further, non-property-related costs, emphasizing the cascading nature of losses associated with property damage.

In contrast, other options illustrate direct losses or costs that are immediate and directly tied to physical damage or theft, rather than the consequent disruptions and associated expenses arising from those events.