Reimbursement Of Insured

What Does Reimbursement Of Insured Mean?

A reimbursement to the insured occurs when an insurance company refunds an amount of money owed to a policyholder. This refund may be for losses the insured has experienced that the insurance company is legally obligated to cover, for expenses incurred by the policyholder, or for other valid reasons.

Insuranceopedia Explains Reimbursement Of Insured

Insurance policies stipulate that an insurance company is obligated to provide financial reimbursement for covered losses. This means that if a policyholder experiences a covered loss, the insurer is legally required to reimburse the insured. A typical example is what happens after a major storm: a homeowner files a hurricane insurance claim, and the insurer pays out for repairs and other covered costs. If the insurance company fails to do so, the policyholder may pursue legal action.

In some cases, insurance companies also reimburse policyholders for out-of-pocket expenses, such as medical costs, including fees for medications or covered treatments. Pet insurance works almost entirely this way: the owner pays the vet directly at the visit, then files a claim and gets paid back for the covered portion of the bill.