Alberta General Insurance Level 1 Practice Exam

In the context of an insurance policy, "coverage" specifically refers to the inclusion of specific risks or losses that are protected under the terms of the policy. This means that the insurance company agrees to provide financial protection against particular events that could lead to a claim. Coverage outlines what is insured and how much compensation the policyholder would receive in the event of a covered loss. For example, if a homeowner has a policy that includes fire damage coverage, the homeowner is protected against losses resulting from fire under that policy.

The other options describe related concepts but do not accurately reflect the definition of coverage. The exclusion of specific risks or losses pertains to what is not covered, while the overall cost of the policy relates to the premium paid for the insurance. The type of claims available refers to the nature of the claims that can be made, which is a different aspect of the policy. Understanding that coverage is about inclusion helps policyholders know what protections they have under their insurance contracts.