What are "damages" typically classified as in insurance?

In the realm of insurance, "damages" are primarily classified as bodily injuries or property damage. This classification stems from the fundamental purpose of insurance policies, which is to provide financial protection against losses resulting from such incidents. When an insured event occurs, the insurer is obligated to compensate the insured for the damages that arise from bodily injuries—such as medical costs and loss of income—as well as property damage, which includes repair or replacement costs for damaged structures or possessions.

Understanding this classification is essential for agents and brokers as it helps frame the discussions around coverage limits, premium calculations, and the overall structure of insurance policies.

The other options, while related to the insurance process, refer to different aspects: claims filed against an insurer pertain to the actions taken by policyholders when seeking compensation; legal expenses incurred relate to costs associated with litigation; and subrogation costs involve the recovery of payments made by the insurer when they seek to claim reimbursement from a third party responsible for the damages. A clear grasp of these distinctions enhances comprehension of how damages function within the broader context of insurance coverage.