What does the term 'policy exclusion' refer to in insurance?

The term 'policy exclusion' refers specifically to situations where coverage is denied. These exclusions are defined within the insurance policy and outline specific conditions, risks, or types of damage that are not covered by the policy. Understanding policy exclusions is crucial for both policyholders and adjusters, as they detail the limitations of coverage and help clarify what is not included in the insurance protection. This ensures that insured parties are aware of potential gaps in coverage that could leave them at financial risk under certain circumstances. Effective risk management relies on recognizing these exclusions to avoid misunderstandings when a claim is made.