Insurance term
Coverage
What the policy responds to
Definition
The set of events, losses, and liabilities a policy agrees to pay for, defined together with its limits and exclusions.
In more detail
Coverage is only meaningful when read alongside the exclusions and the limits. A policy that names a peril in its summary may still decline a claim because of a condition attached elsewhere in the wording.
Limits can be per claim, per item, or aggregate across the policy period. Sub-limits on specific categories are a frequent source of shortfall at claim time.
Glossary entries are general explanations, not advice. Where a term appears in a contract or policy, the definition in that document governs.