An exclusion is something your insurance policy specifically does not cover. Every policy has them. Exclusions define the boundaries of your coverage and are listed in the policy document itself, usually in a section titled "Exclusions" or "What is not covered." Knowing your exclusions is just as important as knowing what is covered.
Insurance companies use exclusions to manage risk and keep premiums affordable. Some perils are too catastrophic or too predictable to include in a standard policy. Floods, for example, are excluded from homeowners insurance because they tend to affect entire communities at once, making them difficult to insure profitably within a standard policy. Instead, flood coverage is offered through a separate program. Other exclusions exist because certain risks require specialized underwriting.
Many exclusions can be addressed with endorsements — add-ons to your policy that extend coverage for specific risks. Others require a separate policy entirely, like flood or earthquake insurance. The important thing is to know where your gaps are before a claim forces you to find out.
We encourage every client to read their exclusions section carefully. It is not the most exciting reading, but it is where the surprises hide. At Truscott, we walk through your exclusions and identify which gaps are worth filling based on your specific risks. Request a Truscott policy checkup and we will make sure you are not caught off guard.
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