In insurance terms, what does 'claims adjustment' involve?

Claims adjustment is a crucial process in the insurance industry that involves determining the coverage applicable to a claim and evaluating the losses that have occurred. This step is essential as it ensures that the insurance company accurately assesses how much the policyholder is entitled to receive based on the terms of their policy. The claims adjuster gathers information, inspects damages, and reviews policy details to make an informed decision on the claim. This meticulous approach allows for fair compensation for the insured party while also protecting the insurer's financial interests.

In contrast, evaluating health risks of a policyholder relates to underwriting, which is focused on risk assessment before the issuance of a policy rather than post-incident evaluations. Setting premium rates involves statistical analysis of risk factors and is determined at the policy's inception, not during a claims process. Assessing employee performance refers to internal evaluations within an insurance company, rather than activities directly related to processing claims.