Which term describes the financial obligation an insurer has after a claim is made?

The term that best describes the financial obligation an insurer has after a claim is made is indemnity. In the context of insurance, indemnity refers to the insurer's responsibility to compensate the insured for losses covered under a policy, bringing them back to their financial position prior to the loss, as much as possible. This fundamental principle of insurance ensures that the insured does not profit from a claim but is made whole for their losses, emphasizing the contractual obligation of the insurer.

Other terms mentioned in the choices serve different purposes in the insurance landscape. A deductible is the amount that the insured must pay out of pocket before the insurer begins to cover a claim, impacting the total amount the insurer is liable for. Exclusion refers to specific conditions or circumstances that are not covered by the policy, effectively limiting the insurer's responsibilities. Subrogation, on the other hand, is the process by which an insurer can recover costs from third parties after covering a claim, reinforcing the idea that indemnity is the primary obligation owed to the policyholder.