The term time element coverage is used when the amount of loss depends on which of the following?
A. The time between the date of loss and the policy expiration date B. The time between the policy effective date and date of loss C. The time of year when a seasonal business suffers a loss D. The time it takes to repair, rebuild, or restore damaged property
The time it takes to repair, rebuild, or restore damaged property
Answer D is correct. The term time element coverage is used for many indirect losses, such as a business income loss, because the amount of loss might not be directly related to the amount of property damage that occurred, yet it is related to the time it takes to repair, rebuild, or restore the damaged property. Many factors can influence the ultimate loss, including the availability of supplies and replacement parts.