What type of loss must Sandra incur for staying in a hotel after damage from Sam's car?

The situation described involves Sandra incurring expenses for staying in a hotel due to damage caused by Sam's car. This scenario falls under the category of an indirect loss, often referred to as a consequential loss. Indirect losses are not the immediate result of an event but arise as a secondary effect.

In insurance terms, when property is damaged—such as in this case where Sandra's home has presumably undergone damage due to the incident—she may need to seek temporary accommodation. The cost of the hotel stay is a result of the initial damage, making it a loss that is not directly related to the physical damage itself but is instead a consequence of that damage.

Direct losses, in contrast, would pertain to the physical harm done to the property itself. A physical hazard relates to a situation or condition that increases the likelihood of an insured event occurring and is not applicable in this context. The proximate cause is the primary cause of the loss, which, while relevant to determining liability, does not directly describe the nature of the loss Sandra is experiencing in her hotel stay.

Thus, because her hotel expenses stem from the secondary effects of the damage caused, the correct classification is indeed an indirect loss.