What does "adjustment" refer to in the context of insurance claims?

In the context of insurance claims, "adjustment" specifically refers to the final disposition of a claim. This involves the process where an insurance adjuster evaluates the claim submitted by the policyholder. This evaluation includes assessing the validity of the claim, determining the extent of coverage, and negotiating settlements based on the findings.

Adjustment is not merely about investigating damages, which is an earlier phase of the claims process where the adjuster inspects the loss or damage. It also is distinct from negotiations regarding policy terms, which are typically handled before any claim arises. Additionally, while assessing liability is a critical component of some claims, it does not encompass the entire process of closing and settling a claim as adjustment does. Therefore, the term "adjustment" encapsulates the comprehensive process leading to the resolution and payment of a claim, making it the most accurate choice in this context.