The trigger for coverage is evidence of physical loss or damage or destruction of property identified in the policy. For the purposes of defining the trigger, it is not necessary to consider the meaning of an event or event, although, as we will see, they may be relevant when applying franchises under the police.
The loss or damage to the property must be absolute and not temporary. For example, in Moore vs. Evans [1918] the insured was unable to provide evidence that goods consigned to a German recipient before the First World War could not be recovered after the war. Consequently, the insured could not prove that a permanent loss had occurred under the policy. This case contradicts an Australian case of Ranicar against Frigmobile Pty Ltd. [1983] in which it is suggested that a change in the physical condition of the goods, although perhaps temporary, may constitute damage.
Most, if not all, ARPI policies contain specific clauses excluding indirect or consequential losses, but are these clauses necessary? In the context of ARPI, it is generally accepted that consecutive or financial losses are not covered without the inclusion of a specific extension. Certainly in the case of Theobaldv. Railway Passenger's Assurance Co. [1854], it was held that a liability insurance policy did not cover financial losses. It is however wise to include the exclusion of consecutive losses.
Physical loss probably requires a physical change in ownership, not just a reduction in value. For example, a factory can be affected by an earthquake insured by ARPI. The building may not be physically affected, but the result is that the factory loses value - potential buyers are concerned about the effects of the tremor. This would not amount to physical loss and probably would not constitute damage, but it would be wise to insert the words "physical" before "damage".
In the case of Glens Falls Insurance Co. against George Covert, the vehicle safety stabilizers fell to the ground. These were sealed units and it was impossible to determine whether there was any internal damage. The manufacturer has withdrawn its warranty and the insured has decided that it will not sell it without the warranty. His claim on his all-risk policy failed because there was no evidence of loss or physical damage, thus giving "damage" the same meaning as "physical loss".
With regard to household policies, the insurance mediator has broadened the meaning of "damage" to include loss of utility. For example, in one case, the insured successfully claimed the cost of unblocking a pipe and the cost was authorized.