What does "exclusion" mean in an insurance policy?

The term "exclusion" in an insurance policy refers to specific conditions or situations that are not covered by the policy. This means that if an event falls under an exclusion, the insurer will not provide benefits or coverage for that event. For example, many policies have exclusions for certain types of damage, like wear and tear or damage caused by natural disasters, which means that if such damage occurs, the policyholder cannot claim insurance benefits for those losses.

Understanding exclusions is crucial because they define the limits of your coverage and clarify what is not protected under the policy terms. This helps policyholders to have clear expectations regarding what will and will not be compensated in the event of a claim.