Definition - What does Coverage mean?
Coverage, or more specifically insurance coverage, is the amount of protection in terms of a sum of money that an insurance company provides to an insured person whereby, in the event of risk or risks insured against take place, such as death or accident, the policyholder or a designated beneficiary or beneficiaries shall receive an indemnification or payment up to the extent of the loss.
Insuranceopedia explains Coverage
Coverage may pertain to life, property, or health insurance. For example, a life insurance policy that provides $500,000 coverage would award the beneficiary the death benefit of $500,000 if the insured passed away. With automobile insurance, $5,000 worth of coverage may represent the current value of the car upon its acceptance for coverage by the insurer. This means that if the car has theft coverage, and it is stolen, the insured owner shall receive $5,000 as replacement value for the car. As for health insurance, coverage may refer to the entitlement to reimbursement or payment of certain medical services as spelled out in the policy contract.
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