What is an incurred loss?

What is an incurred loss? A insurance policy may state that they will only reimburse incurred costs. So what does an incurred cost mean? It means in laymen’s terms they want you to pay for it first and then they will reimburse you when you provide documentation to them to prove the incurred cost. An incurred Loss is a sustained loss that could be paid for or not paid for during a specified time period.