What is the primary purpose of "claims adjustment" in insurance?

The primary purpose of "claims adjustment" in insurance is to settle an insurance claim. This process involves assessing the validity of a claim submitted by the policyholder, determining the extent of coverage, and ensuring that the claim is resolved fairly in accordance with the insurance policy terms. Claims adjusters play a crucial role in this process by investigating the circumstances surrounding the claim, gathering evidence, and negotiating a settlement amount if the claim is legitimate.

This function is vital because it ensures that both the insurer and the insured are treated fairly. By efficiently managing claims, insurers maintain trust in their services and can fulfill their commitments to policyholders. Claims adjustment is an essential component of the insurance process, distinct in purpose from activities like changing policy terms, advertising policies, or collecting premiums, all of which serve different roles within the insurance industry.