What adjustments can insurance companies make to claims?

The correct answer highlights key factors that insurance companies consider when adjusting claims. Adjustments based on claim severity take into account the extent of the damage or loss incurred, which directly impacts the amount of compensation that is warranted. Applicable coverage limits are constraints on how much the insurance policy will pay out based on the terms of the contract, and deductibles are an upfront amount that the policyholder is responsible for before the insurance company pays out on a claim.

By evaluating these elements, insurers can ensure that payouts are fair and aligned with the policy provisions. This structured approach helps maintain the integrity of the insurance process and keeps premiums stable for all policyholders, as it prevents excessive payouts that could lead to increased rates in the future.

In summary, claims adjustments focus on these critical financial elements and the risk associated with the specific incident, reflecting the purpose of insurance to manage risk effectively.