Adjustment has many meanings in multiple contexts.

In relation to insurance, it is the determination of the amount due for payment under a policy of insurance. Insurance adjustment denotes the determination of the amount of a claim (insurance claim) for settlement, particularly for a policyholder against an insurance company. The process of determination of dues take into consideration any objections leveled by the debtor or insurance company, in addition to the allegations raised by the claimant in support of such a claim.

However, adjustment of claims is doesn’t necessarily involve only those claims against insurance companies. In its connection with a debtor, a creditor (seller on credit) may make an allowance (i.e., adjustment), in response to a complaint raised by the debtor as to correctness of the account or other aspects of the claim.

Adjustment may also constitute a reduction in the claim or account by a creditor for the purpose of inducing a prompt settlement of dues (adjustment of accounts).

In the context of liquidated demand/ unliquidated demand, adjustment is payment or settlement (of a liquidated demand), or ascertaining the amount due or to settle (in an unliquidated demand). In the latter case (unliquidated demand), settlement denotes a mutual adjustment as being effected between the parties, and the mutual agreement on the exact amount of the dues (the balance).

Adjustment may also refer to the case where an average adjuster works out, in determination of the general average (gross average), the rights and liabilities that arise between the parties involved.