What does "exclusions" refer to in an insurance policy?

In an insurance policy, "exclusions" specifically identify situations, circumstances, or types of damage that are not covered by the policy. This is important because it helps policyholders understand the limits of their coverage and what they cannot expect to receive benefits for in the event of a claim. By clearly outlining these exclusions, insurers protect themselves from claims associated with risks they do not intend to cover while informing clients of the areas of potential liability.

This clarity helps in setting appropriate expectations for the insured regarding their protection under the policy, empowering them to make informed decisions regarding additional coverage or endorsements if they find that the exclusions are significant for their needs.