What is the primary responsibility of the insurer?

The primary responsibility of the insurer is to compensate for covered claims as promised. This fundamental duty is grounded in the insurance contract, which establishes an agreement between the insurer and the policyholder. When individuals purchase insurance, they expect that in the event of a covered loss, the insurer will fulfill its obligation and provide financial support as outlined in the policy. This compensation is critical because it allows policyholders to recover from losses, thereby fulfilling the essential purpose of insurance.

While estimating replacement costs, managing complaints, and setting premiums are important functions performed by insurers, they are secondary to the core obligation of covering claims. The insurer's promise to pay claims is what provides policyholders with peace of mind and financial protection, making it the cornerstone of the insurance relationship.