Description This refers to the term used to describe the cause of a loss. This concept maintains that an insured should not be compensated by an insurance company for an amount greater than his or her economic loss. An example of this behavior is speeding and driving erratically during a rainstorm or having a swimming pool that is not surrounded by a lockable fence or other protective device. This type of coverage pays an amount calculated by subtracting an insured property's amount of physical depreciation from its replacement cost. This type of coverage pays the amount necessary to repair, rebuild, or replace an asset at current market prices. Term