What type of loss is incurred when a policyholder has to temporarily relocate due to damage to their home?

A policyholder incurs an indirect loss when they have to temporarily relocate due to damage to their home. Indirect losses, also known as consequential losses, arise as a result of a direct loss. In this case, the damage to the home is the direct loss, while the additional expenses and disruptions caused by having to find alternative accommodation and live elsewhere represent the indirect loss incurred. This type of loss does not involve physical damage to property but rather the financial impact that results from the inability to reside in the damaged property.

The other types of losses listed do not appropriately describe the situation. A direct loss would refer to physical damage to the home itself. A contingent loss pertains to losses that depend on unforeseen events, and catastrophic losses generally involve large-scale events that result in significant property damage or extensive loss. The scenario presented clearly describes the secondary effects of a direct loss, thus categorizing it as an indirect loss.