Insurance Coverage Area: The insurance coverage area can be defined as the geographic area in which an insurance policy’s benefits will apply to the insured. In other words, it can be the area in which an insurance company is authorized/licensed to do business and write policies.
Insurance is a location-based business. In every type of policy, it is assumed that it will be in force in a stated geographical area, called the coverage territory. Most liability policies will only cover incidents that occur in the coverage territory.

What Is Worldwide Coverage?

Worldwide coverage is primarily the scope of some insurance policies provided by insurance companies that cover the insured globally. It covers the insured business or individual against loss or damage to belongings, property, or business. The important aspect of worldwide coverage means that no matter where an individual’s personal property is lost, stolen, or damaged, it will be covered for any associated losses globally.

Factors to Consider for Coverage

It’s very important to know that the insured should understand the meaning of the coverage area of their insurance policy and how the policy has zero risk coverage. For instance, Suppose the insured has auto insurance—a policy issued in the United States. In this case, the insured may not be covered by incidents or accidents outside of US territory. Therefore, the policyholder traveling outside the US may have to either secure insurance with additional coverage that expands the coverage area or insures has to buy another policy that provides the necessary coverage outside the US territory.

Types of Insurance and Their Territory Coverage

Auto Policies
Standard commercial auto policies cover the entire country, specifically the USA and Canada. Suppose a driver who wants insurance out of the USA and likes to drive in Mexico, then he must buy that insurance coverage in that country or add a rider to a standard policy. Auto policies for private vehicles are available worldwide with certain stipulations and conditions.

Homeowners Insurance
It is tied to the property insured, but certain theft and liability coverage can extend to the location of the policyholder in another state or country, but only under certain, limited circumstances.

Workers’ compensation
Insurance applies to the state it’s purchased from, and it follows the laws that the state has created. Depending upon the policy documentation or country-specific rules In some cases, workers’ compensation insurance does extend to employees who are traveling in other states and overseas on a temporary basis.

Health Insurance
Most health insurance policies cover any health issues that occur worldwide. For example, if you have a health insurance policy from a U.S. insurer and you met with an accident while skiing in Holland and have to go to the hospital, your health insurance policy will most likely cover that.

When a policy doesn’t specify the coverage territory, then that usually implies worldwide coverage.