For this, we look into the user agreement/contract which details what is covered, what is not and up to which amount. Depending on one's situation, it's possible to not assume any loss e.g. when a bank files for bankruptcy and your deposit does not exceed the max insured coverage (from where i live).

In binance? there are only tweets that says "your funds are safu" in case of hack and few articles.... which isn't surprising! they are merely relying on their own set money pool which will be shared by everyone. In the worst case scenario, it wouldn't be surprising to only get bits of your total cryto out of it, hence saying funds are insured seems wrong and sends the wrong message. plus this is all supposing that their safu jar remains untouched and CZ keeping his word-- to use them all for their users.

I agree with the lesser evil point but I would never think I'm insured just because the exchange has set aside some funds that they also control.