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

The term "exclusion" within an insurance policy specifically refers to risks or losses that the policy does not cover. This is a crucial part of the policy language as it clarifies the limitations of coverage, ensuring that policyholders are aware of what is not included. Understanding exclusions helps consumers make informed decisions about their insurance needs and expectations. For example, if a policy has exclusions for certain natural disasters or specific types of property, the insured should know that any claims related to those areas will not be compensated.

In contrast, the other options refer to different aspects of insurance policies that do not directly describe exclusions. Partial payments and higher deductibles relate to the terms of coverage or claims processing, while additional coverage options pertain to endorsements or riders that expand upon what is initially included in a base policy.