What defines the coverage or policy territory?

The coverage or policy territory is defined by the geographical area in which the policy provides protection. This aspect is crucial as it delineates the locations where the insured may be covered for various risks, such as damage to property or personal injuries. The specification of a policy territory helps both the insurer and the insured understand the limitations and extent of coverage.

In contrast, considerations such as the minimum coverage required relate to the baseline protection that must be included in the policy, but do not define geographical aspects. The duration of the policy pertains to how long the coverage is effective, which is not related to where it is applicable. Lastly, total premium costs reflect the financial aspect of the policy rather than its scope or area of effectiveness. Therefore, the geographical area of coverage is the correct and defining characteristic of policy territory.