Hello! Both terms in this case are to do with the payment of money. Perhaps to understand the meaning of compensate your sentence could be revised to: "She placed a claim with the insurance company. The insurance company compensated her for the damage to her car." (Note: Cars are not injured, they are damaged.) In my example, she was given money by the insurance company to repair her car. This money is "compensation". "offset" is a little more difficult to explain, but I will try. If the damage to the car costs $1000, but the insurance company would only give her $800 to repair it, it might be said that because she had to pay the extra $200 to get the car repaired, the insurance company had only offset the total amount. So your sentence might then read: "She placed a claim with the insurance company for $1000, but the company would only pay $800. The $800 offset the cost to repair her car, but she still had to pay $200 to have the car repaired". I am sorry that this is complicated, but I hope it helps.