Direct property exposures refer to situations that can cause immediate or direct losses to property. This can include losses to real or personal property, and the term typically refers to destruction, damage, or disappearance. In the context of insurance, property owners commonly buy property insurance to protect against various losses related to their property.
Direct property exposures are the opposite of indirect property exposures, wherein the threat of financial loss occurs as a result of direct property exposures. For example, lost income following the destruction of a commercial property would be an indirect property exposure. In this case, the destruction of the commercial property would be the direct property exposure. Property insurance can protect against a number of different types of exposures. It is particularly useful for people who have highly valuable property.
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