What does "property damage" in an insurance claim refer to?

"Property damage" in an insurance claim refers specifically to physical damage to tangible assets that are covered under the policy. This means that when an insured event occurs, such as a fire or a storm, resulting in physical harm to property like buildings, machinery, or personal belongings, it is classified as property damage.

This definition is crucial for adjusters to understand when assessing claims, as it establishes the scope of coverage based on the terms outlined in the insurance policy. The focus is on the physical integrity of items that can be touched and valued, which aligns with the majority of property insurance policies.

In contrast, cosmetic changes or superficial damage may not amount to property damage if the item remains functional and intact overall. Similarly, physical damage to intangible assets, such as intellectual property or brand reputation, does not qualify under traditional definitions of property damage in insurance contexts, which concentrate on tangible items. Financial loss due to business interruption, while a significant concern, typically falls under separate coverage such as business interruption insurance rather than property damage. This clear definition helps ensure that claims are appropriately categorized and processed by the insurance provider.