Legal Definitions - casualty gain

Definition: A casualty gain is a term used in insurance to describe the profit that an insured person or entity makes when the benefits paid out exceed the adjusted value of the insured property.

Example: Let's say that a homeowner has a house that is insured for $200,000. Unfortunately, the house is destroyed in a fire, and the insurance company pays out $250,000 to cover the damages. In this case, the homeowner has experienced a casualty gain of $50,000.

Explanation: The example illustrates how a casualty gain works. The insured property (the house) was worth $200,000, but the insurance company paid out $250,000 to cover the damages. This means that the homeowner made a profit of $50,000, which is the casualty gain. Essentially, the homeowner received more money than the property was worth, which is a positive outcome in the context of insurance.