In medieval Ireland, for example, a king was not the head of state but rather a crime-insurer: if someone committed a crime, the first thing that happened was that the king paid the "insurance" benefit to the victim, and then proceeded to force the criminal to pay the king in turn. Restitution to the victim’s insurance company was completely derived from the idea of restitution to the victim.

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Source: The Ethics of Liberty, page 126

How did the king know if the insurance claim is legit?