Roy Rogers once said an insurance policy is one page that tells you what insurance you have and 50 pages that tell you why it does not apply in your particular situation. The 50 pages that take coverage away are called exclusions.
Exclusions are the insurance companies way of narrowing the risk they have accepted under the contract. For example if you have a policy of insurance on your car, but the situation that arises falls within an exclusion you bear the risk of loss and not the insurance company. In a recent post entitled Don't Believe The Hype You Are Not Friends, I made the point that all you get from insurance is the written contract. The nice sales pitch and fuzzy promises on TV give way to the hard realities of what's written in the insurance contract when its time for a claim.
If the insurance company denies your claim, it is usually because of exclusion. By way of example consider a common exclusion in a personal auto insurance policy, the business exclusion, which takes coverage away if your vehicle is used in a business instead of personal use. Even if you have your car insured for liability and you are in a crash and hurt someone you won't have any coverage if you were using a personal auto on business. Fortunately exclusions in the policy must be phrased in clear, plain and unambiguous language. If the insurance company claims that exclusion applies it is their burden to prove that it applies. So to protect yourself read your policy carefully to see what is covered before you need to make a claim.
Exclusions are the insurance companies way of narrowing the risk they have accepted under the contract. For example if you have a policy of insurance on your car, but the situation that arises falls within an exclusion you bear the risk of loss and not the insurance company. In a recent post entitled Don't Believe The Hype You Are Not Friends, I made the point that all you get from insurance is the written contract. The nice sales pitch and fuzzy promises on TV give way to the hard realities of what's written in the insurance contract when its time for a claim.
If the insurance company denies your claim, it is usually because of exclusion. By way of example consider a common exclusion in a personal auto insurance policy, the business exclusion, which takes coverage away if your vehicle is used in a business instead of personal use. Even if you have your car insured for liability and you are in a crash and hurt someone you won't have any coverage if you were using a personal auto on business. Fortunately exclusions in the policy must be phrased in clear, plain and unambiguous language. If the insurance company claims that exclusion applies it is their burden to prove that it applies. So to protect yourself read your policy carefully to see what is covered before you need to make a claim.
