What term refers to parts of an insurance policy that remove coverage for certain circumstances?

The term that refers to parts of an insurance policy that remove coverage for certain circumstances is "exclusions." Exclusions delineate specific scenarios or circumstances under which the policy will not provide coverage, effectively stating what is not insured. This is crucial for policyholders to understand, as it clarifies the limits of their insurance protection and helps them to avoid misunderstandings about what is covered.

Exclusions are commonly included in various types of insurance policies to manage risk effectively for insurers and to ensure that coverage is provided only for specific events or circumstances that are deemed insurable. For example, a standard homeowner's insurance policy might exclude coverage for damage caused by flooding or earthquakes unless additional coverage is purchased.

In understanding insurance policies, knowing the exclusions can help individuals better assess their level of risk and determine if they need to acquire additional types of coverage to protect against those excluded situations.