Which sections of an insurance contract are designed to limit coverage?

The sections of an insurance contract that are designed to limit coverage are the exclusions. This part of the policy specifies what is not covered, clearly outlining the situations, conditions, or losses that the insurer will not pay for. By articulating these exclusions, the insurer protects itself from having to fulfill claims related to risks they do not intend to cover, thus establishing clear boundaries for the scope of coverage.

For example, an insurance policy may include exclusions for acts of war, pre-existing conditions in health insurance, or specific hazards that are deemed too risky. By understanding these exclusions, policyholders can make informed decisions about their coverage and assess whether additional coverage or endorsements are necessary to address these areas.

In contrast, the insuring agreements define the coverage provided, conditions set forth the obligations of both the insurer and the insured, and declarations provide essential information about the policyholder and the coverage amount. Each of these sections plays a critical role in the overall structure of an insurance contract, but it is the exclusions specifically that limit the potential claims under the policy.