What is meant by "full and final settlement" in insurance claims?

"Full and final settlement" in the context of insurance claims refers to a resolution where the insurer pays a specified amount that fully settles the claim and releases further liability. This means that once the settlement is agreed upon and payment is made, the insurer has no further obligations related to that particular claim. The insured party accepts this payment as complete compensation for their loss, and it prevents any future claims or legal actions regarding the same incident.

This concept is crucial in the claims handling process as it provides closure for both the claimant and the insurer. By agreeing to a full and final settlement, both parties can move forward without the risk of future disputes about the same claim. It alleviates the uncertainty for the claimant—the focus shifts to recovery and restoration without ongoing arguments over liability or additional payouts.