What is the meaning of exclusions in insurance policies such as acts of God, war

Vimal Joshi
Updated: 13 Dec 2021, 05:37 PM IST
TL;DR.

When you are set to take an insurance policy, you must be careful about what are the set of conditions that stand to be excluded from your policy. We uncover some of the common exclusions for you

Damage caused by natural disasters is generally not covered by the insurance policy  

Damage caused by natural disasters is generally not covered by the insurance policy  

An insured consumer is certain to get outraged upon getting their claim rejected for what would appear as a frivolous cause to them. This seems like a rerun of a Hindi movie – OMG: Oh My God! where protagonist Kanji Bhai (played by Paresh Rawal) sues the insurance company for not giving the insurance money after his shop was destroyed by a natural calamity – a common clause of exclusion.

For those who are acquainted with the tenets of the insurance sector, such rejections are routine.

Recently, a health insurance company rejected the claim of the kin of an insured biker in Ludhiana who died in a bike accident. The ground of rejecting the claim was that he rode a 346-cc motorcycle, more than the engine capacity of 150 cc stipulated in the insurance policy.

After the case created a stir on social media, the company cleared its position and claimed to have paid to the deceased’s family.

This demonstrates how potent these generally overlooked “exclusions” can be and how it is imperative to meticulously scrutinise each of the provisions, which can render the policy effectively redundant.

These are some of the common scenarios wherein the insurer is not supposed to clear the claim even after the loss such as fire or accident has taken place.

Common exclusions

These exclusions can be of various forms for instance death caused by suicide or accident caused by an act of God which includes natural disasters.

In health insurance, common exclusions include pre-existing medical conditions, cosmetic surgery, dental treatment without hospitalisation, and pregnancy-related conditions.

Policy-seekers must take note of the fact that there are some exclusions which are common across all policies whereas some could be peculiar to one particular insurer. So, before taking a policy, one ought to be wary about unusual exclusions in a policy.

It is, thus, vital to know that even with a comprehensive insurance cover, everything does not get automatically covered such as dental treatment that does not require hospitalisation.

Similarly, in life insurance, when an insured person commits suicide soon after the policy, it is not eligible for claim. Oftentimes, life insurance companies do not cover death caused due to war, adventure sports, or because of drugs and criminal activities.

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Cosmetic surgeries and pre-existing diseases are generally excluded from health insurance covers

When fire or destruction was caused by a terrorist attack or civil war, general insurance policies don’t cover them.

For motor insurance, it is imperative to keep the vehicle in order to avoid the claim being rejected. For instance, if an insurance claim finds that the vehicle was not in good condition and had faulty parts at the time of accident, it can reject the claim on these grounds.

Other common exclusions include drunk driving, performing stunts, or driving without a valid driver’s licence.

In summary, your regular insurance cover might protect you from most untoward eventualities. But as they say, exceptions are always there. Insurance policies are no exception to this general rule.

First Published: 13 Dec 2021, 05:37 PM IST
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