What Is Physical Loss or Property Damage in an Insurance Claim?
When you are looking at insurance claims and see the words “property loss” or “property damage” you may wonder what this implies and how it will affect future insurance claims.
To keep it simple, for example, property liability is considered when the insured property is damaged by fire, water, or wind. These all result in a physical change or structural damage to that property.
However, when, to the naked eye, the insured property’s structure is unaltered and the insured claims there has been a loss of value, usefulness, or functionality, then it becomes more difficult to determine whether or not coverage is triggered.
Loss vs Damage
To explain further, there is a difference between property loss and property damage. Using a vehicle as an example, property loss may occur when the insured item is stolen. Property damage may occur when the insured item is physically damaged by a hailstorm. Both may occur if the insured item is crushed by a landslide. So the difference between loss and damage is significant in these insurance claims.
With this in mind, there may be reasonable qualifications to file as property loss if, for some reason out of your control, your place of business becomes unusable in some way or for a period of time.
However, it may not be considered property damage. An example of this differentiation could be something like a gas leak under the building which cannot be fixed without some form of demolition, which makes the business location unusable for clients and staff.
In the same way, there may be reasonable qualifications to file as property damage and not property loss if, for some reason out of your control, your insured item is damaged in some way that makes it usable but may diminish the beauty of the item. An example of property damage of this type would be hail putting dents in a metal roof that may not diminish the effectiveness of the roof in any way but makes the roof less appealing.
What is the Difference Between Property Loss/Damage and Property Liability?
When filing insurance claims for property loss or damage there is one other term that can come into play: property liability insurance.
Property liability insurance is specific for when your property causes damage or loss to another’s insured item(s). This can take many forms such as damaging a vehicle in a fender bender all the way to a tree on your property falling on someone else’s property.
The important thing to keep in mind when dealing with property liability claims is the language of loss or damage, which we have already covered, and how those apply given your situation. In some cases, liability insurance may cover property loss. In other cases, liability insurance may cover property damage.
Witness Litigation Support
One final piece to understanding property loss is understanding the role and function of witness litigation support while filing insurance claims. Witness litigation means calling in someone, typically an expert on the specific property or circumstances surrounding the insurance claim, to serve as a witness either for or against the insurance claim being made.
As a simple example, if you are filing an insurance claim for property loss due to an electrical fire after a lightning strike, then you may use witness litigation support as a way to call on an electrician and an investigator to prove how the lightning strike overloaded the circuit breaker and started the electrical fire. This may be necessary to determine property damage or property loss if it could seem as if the electrical fire was because of some faulty wiring rather than the lightning strike.
Knowledge is Power When it Comes to Property Loss Insurance Claims
When you are attempting to file property insurance claims it is always important to know the difference between property loss and property damage. Understanding how property liability influences the outcomes of insurance claims is key to successfully and properly filing insurance claims, too. Lastly, never forget witness litigation support as it may help provide validity to your claim.
