What is Coverage? - Insurance Navy. In insurance, coverage refers to the extent or liability protected for an individual or entity through insurance services, such as a health insurance company. The specific protection or conditions are outlined in the insurance policy. The conditions include the types of coverage a policy will grant the policyholder, such as the types of damages, losses, or injuries the policyholder is protected against. Coverage details the specific situations (like flood coverage), risks, and assets (such as personal belongings) that an insurance policy will compensate for in the event of a loss. It is outlined in the policy and can vary greatly depending on the type of insurance, the insurer, and the specific needs or requests of the insured. For example, in a car insurance policy, coverage could include damages to the vehicle, medical expenses for injuries, or liabilities for any damage caused to other people’s property.