Alberta General Insurance Level 1 Practice Exam

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What does the term "exclusion" refer to in an insurance policy?

The items or risks that are not covered by the policy

The term "exclusion" in an insurance policy specifically refers to the items or risks that are not covered by the policy. This is a critical aspect of any insurance agreement, as exclusions define the boundaries of the coverage provided. For instance, a homeowner's insurance policy may exclude coverage for certain natural disasters or specific types of damage, such as wear and tear. By clearly outlining these exclusions, insurance policies help both insurers and policyholders understand the scope of protection and avoid misunderstandings regarding what is and isn’t covered in the event of a claim. Understanding exclusions ensures that policyholders can adequately assess their risk and seek additional coverage if necessary for the excluded items or risks.

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The total amount payable under the policy

The additional coverages available in an endorsement

The benefits provided by the insurer

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