Insurance

Exclusions

An exclusion is an event, condition or type of loss that an insurance policy does not cover.

4 min

Insurance 101 • 06

An exclusion is something the policy leaves out.

If a loss falls under an exclusion, the insurer may not pay that claim.

Exclusions are one reason the policy wording matters.

The word “insured” does not mean every bad event is covered.

Policies may exclude or limit

01Certain types of water damage02Some pre-existing medical conditions03Specific high-risk activities04Wear and predictable damage05Events that require optional coverage

Exclusion and deductible solve different problems.

Exclusion

Defines a risk the policy does not cover.

Deductible

Shares the cost of a covered risk.

A deductible cannot fix an excluded loss.

Loss$20,000

Deductible$1,000

If coveredDeductible may apply

If excludedPolicy may pay $0

Optional coverage can sometimes fill a gap.

Endorsements or riders may add protection for risks the basic policy excludes, depending on the product and insurer.

When reading a policy, look for

01Exclusions02Definitions03Conditions04Optional endorsements05Separate limits

Remember this

The exclusions page may matter more than the sales page.

Insurance protects against the risks written into the contract, not every risk you can imagine.

Lesson complete

Reviewed 2026-08-18

Sources

Financial Consumer Agency of CanadaHow insurance works ↗Financial Consumer Agency of CanadaHome insurance for unexpected events and disasters ↗

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