The essential point of insurance is an agreement between an insured and an insurer:
The insured agrees to pay the insurer a premium
The insurer agrees to indemnify the insured in the event of a covered loss
To indemnify an insured, the insurance company either pays them the cash value of the loss or pays to repair or replace their damaged property. In either case, the insurer is bringing the insured back to the same financial state they were in right before the loss occurred.