What is defined as a loss relating to property insurance for the policyholder?

A first party loss refers to the financial impact experienced by the insured as a direct result of damage or loss to their property. This type of loss is significant in property insurance because it indicates that the policyholder is directly affected and is seeking compensation from their own insurance policy for damages incurred. For example, if a homeowner suffers a fire that damages their house, the loss they experience falls under first party losses as they are filing a claim with their insurers to recover the costs associated with the damage.

In contrast, other types of losses, such as third party losses, would involve another party's claim against the policyholder’s insurance because of damage caused to that party's property or person. Combined loss generally refers to packages of loss or claims from multiple sources or types, while subrogation loss pertains to the insurance company's ability to recoup costs from a third party after it has paid out a claim. Thus, the definition of first party loss is specifically tied to the policyholder’s own insurance claim for damages to their property, making it the correct choice.