What is the insurance industry term for the amount paid out for a claim?

The amount paid out for a claim in the insurance industry is referred to as indemnity. This term signifies the compensation provided to policyholders for their covered losses or damages. Indemnity aims to restore the insured party to the same financial position they were in before the loss occurred, essentially putting them back to where they were without profiting from their insurance coverage.

In contrast, the deductible is the amount that the policyholder must pay out of pocket before insurance kicks in, which does not represent the amount of the claim. The premium is the amount paid for the insurance policy itself, not for a claim made against it. Assessment generally refers to a determination of value or risk but is not commonly used to describe payouts for claims. Understanding these distinctions helps grasp the financial mechanics behind insurance policies and claims processing.