A specific condition, situation, or circumstance that is not covered by an insurance policy. Common exclusions include flood damage on standard homeowners policies and intentional acts. Understanding your policy exclusions is critical to avoiding gaps in coverage.
Related Terms
Endorsement
An amendment or addition to an existing insurance policy that changes its terms or coverage. Also called a rider, endorsements can add, remove, or modify coverage. Common examples include adding flood coverage to a homeowners policy or scheduling expensive jewelry.
Covered Peril
A specific risk or cause of loss that is included in an insurance policy. Fire, theft, windstorm, and hail are common covered perils in homeowners insurance. If a loss is caused by a peril not listed, the claim may be denied unless you have an open peril policy.
Named Peril Policy
An insurance policy that only covers losses caused by perils specifically listed in the policy, such as fire, theft, or windstorm. If a loss is caused by a peril not on the list, it is not covered. Named peril policies are generally less expensive than open peril policies.