What is a policy exclusion?

A policy exclusion is a provision in an insurance policy that removes or restricts certain coverage. This means that if a situation or event is excluded from your policy, you will not be eligible for reimbursement from your insurance company for losses resulting from it. A policy exclusion is different from a policy limitation, which limits the amount of coverage that is available for a covered loss. In North Carolina, policy exclusions are commonly found in property insurance policies, personal injury liability policies, and health insurance policies. Examples of policy exclusions in North Carolina include losses related to flooding, intentional acts, contractual liability, punitive damages, and losses related to pets. When an insurance policy is issued, the policy holder is given a clear explanation of the policy exclusions included in their policy. It is important to read and understand the policy exclusion provisions of your insurance policy so that you are able to understand the scope of the coverage available in the event of a loss. Policy exclusions in North Carolina are designed to protect both insurance companies and policyholders. By laying out clear exclusions to a policy’s coverage, policyholders are able to make an informed decision about the level of coverage needed for their specific situation. Insurance companies, on the other hand, are able to protect themselves from risk and limit the scope of their liability in certain situations.

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