What type of loss does Janie experience when she loses a month of rental income due to flooding repairs?

When Janie loses a month of rental income due to flooding repairs, she is experiencing an indirect loss. Indirect losses, also known as consequential losses, are not the result of a direct physical damage to the property itself, but rather the economic impact that results from that physical damage. In this case, the direct loss would be the damage to the property caused by the flooding. However, the rental income that Janie loses while the property is undergoing repairs is a separate financial impact that occurs as a consequence of the direct loss.

This distinction is important in insurance and risk management, as policies may cover direct losses through property damage but often require specific endorsements or separate coverage to address indirect losses such as lost rental income. Understanding this classification allows adjusters and property owners to better navigate their insurance claims and ensure that they receive adequate compensation for both direct and indirect losses.