Insurance coverage is the commitment made by the insurer to pay compensation to the insured (or their beneficiaries). This, with the aim of repairing the consequences of a loss.
It should be noted that the coverage has a limit called the insured capital. This is established at the time of the contract.
Coverage or protection
Coverage, as a synonym for protection, can also be understood as all the risks or possibilities of claims that are protected by the policy. Only when one of them occurs is the insured able to request compensation.
For example, suppose a user’s home is insured only against fire and earthquakes. So, if the real estate is damaged by a flood caused by atypical rains, the insurer is not obliged to make any disbursement.
Coverage according to type of insurance
The nature of insurance coverage varies depending on the type of policy:
- Life insurance: Coverage is usually activated in the event of death. The insurer will pay a previously agreed sum, estimated based on the characteristics of the contractor: Age, the existence of unhealthy habits, among others.
- Health insurance: The policy assumes a part of the insured’s medical expenses. This, in exchange for the payment of a fee that is normally monthly. To determine the scope of coverage, pre-existing conditions are taken into account, which are all conditions (such as pregnancy) present before contracting the insurance. Likewise, the age and health level of the protected person is considered.
- Property insurance: The policy compensates for the damage caused to the property of the insured against various claims such as theft and fire. Compensation is calculated based on the losses recorded and is not necessarily equal to the insured capital.
It is worth clarifying that civil liability policies also fall into this last category. Said coverage serves to repair personal or material damage that the insured may cause to third parties.