insurance::claim-settlement

Claim Settlement

The final resolution of a claim by agreement between insurer and claimant, extinguishing the insurer's liability.

Canonical Definition

Claim settlement is the process by which an insurer and a claimant reach a final agreement on the amount payable in respect of an insured loss, thereby extinguishing the insurer's liability under the policy for that claim. Settlement may be reached by payment in full, partial payment with waiver, repair or replacement in kind, or rejection with or without dispute. A settlement agreement is legally binding and typically precludes further claims arising from the same event. Source: IAIS Claims Handling Guidance; Insurance Europe Claims Management Standards.