Direct Physical Damage

by Rick Abbott PE, SE

“I don’t understand the delay.  My property is obviously damaged.  Why won’t the insurance company just pay for the damage?”

I hear this question often.  The answer normally has to do with whether there was “Direct Physical Damage or Loss” to the property.

The following is a non-lawyer, unbiased explanation of “Direct Physical Damage or Loss” without big terms and case law examples.  As professional engineers, we are required to uphold the general welfare of the public.  Engineers are bound to an Ethical Code of Conduct (NSPE).  We have no “horse in the race.”  We are not trying to give a reason to deny a claim, or give a reason to award a claim.  We profit from neither.  We are given questions that must be answered.  We look at observations and apply principles of engineering and science to explain technical issues of forces, loads, fracture, yielding, resistance, factors of safety, code issues, construction standard, etc.…

The most typical questions needing to be answered are:

  • Is the property damaged?
  • What is the extent of damage?
  • What is the cause of damage?

Answers to these types of questions help adjusters and owners apply coverage based on the specific wording in insurance policies.  Whether a claim is paid or not depends largely on the determination of whether the property sustained “Direct Physical Loss or Damage.”  The following is a simple breakdown of this phase word by word.


First, it would be prudent to eliminate items that are not damaged.  It sounds simple, but in many cases, it is not simple.

The following questions can be asked to conclude if something is damaged:

  • Is it altered from a previous state?
  • Was there a satisfactory condition that changed to an unsatisfactory condition?
  • When did this change occur?
  • Are repairs needed?

Often the required repairs will help identify the damage.  If items A, B, and C all need to be removed and replaced, each should have a reason for replacement.  The stated reason for each repair item might give hint to the most likely cause of damage.

The general public has an understanding of what is considered to be damage.  The criteria for hail damage is based on this understanding.  According to the Webster Dictionary, damage is defined as follows:

physical harm caused to something in such a way as to impair (lessen, weaken, reduce, diminish) its value, usefulness, or normal function.

Therefore, according to the general public’s understanding of what damage is, an item is damaged when its value, usefulness, or normal function has been lessened, weakened, reduced, or diminished.


The word “physical” in front of the word “damage” can be explained as:

  • Something is physical when a person is able to see it with the naked eye.
  • When it can be captured with a clear description or a photograph.
  • When something is altered, a change occurred, or something is different.
  • The change is tangible.
  • When a person can point to it and explain a difference.


  • “That roof surface has a round indented blemish right there.”
  • “That shingle is creased right there.”
  • “That end wall is displaced right there.”

These are examples of physical changes.


The word “direct” in front of the words “physical damage” means it caused it.  There is a direct link from the physical damage to the cause.


  • “The car, which is still in the wall, hit the wall directly.  It was the cause of the wall movement.”
  • “The hail, which is no longer at the site, hit the roof directly causing a puncture.”

Often there is no question that there is physical damage.  The change is obvious.  The cause may be unknown or there might be a mixture of damages and multiple causes over an extended period of time.

A simple and widespread example is deterioration of a roof covering.  There is an expected life for most roofing materials.  They break down and deteriorate.  This deterioration is unavoidable in many roofing materials.  Deterioration is a cause of damage.  A covered cause (such as wind and hail) changes the appearance.  Is the change in the roof directly related to deterioration or to wind and hail?  This is a common problem that is often encountered.


The word “physical” is not used on the word “loss”.  “Loss” can occur without physical damage.  This can be difficult to grasp, but there may be a situation, where the owner has lost money due to some event that caused no physical damage to the property.