I know this is late reply, but it might help someone else as well.
Move your config file up one folder and change the "../public_html" to "public_html"
I just got done dealing with this.
Yes you need to have the...
coverageReporter: {
type : 'html',
dir : 'coverage/'
}
...as Acosta stated, but your also instructing Istanbul when writing the report files to go up one directory and then into the public_html
folder. If the the karma.conf.js file is located in the same folder as the app and test folders then your reports should render in the proper location.