What is the primary goal of an insurance claim?

The primary goal of an insurance claim is to restore the insured to their financial position prior to the loss. This principle is rooted in the fundamental purpose of insurance, which is to provide financial protection against unforeseen events or losses. When an insured party suffers a loss covered by their policy, the claim process is designed to help them recover and get back on their feet without experiencing a financial setback due to the incident.

Restoring the insured's financial position means compensating them for the loss to the extent specified in their policy, thereby fulfilling the insurer's obligation. This process often involves assessing the damages, determining the policy limits, and establishing the appropriate compensation to ensure that the insured can recover from the loss.

This focus on restoration is key to understanding the nature of insurance as a risk management tool, emphasizing support for policyholders in their time of need.