What would be an example of a common policy exclusion?

Natural disasters like earthquakes are typically considered common policy exclusions in standard insurance policies. This is because many insurers opt to exclude certain high-risk events, like earthquakes, to manage their exposure to significant financial loss from catastrophic events. As a result, policyholders often must purchase separate earthquake coverage if they want to be insured against such events.

In contrast, accidental damage caused by the insured can sometimes be covered under certain policies, depending on the terms and conditions set by the insurer. Fire damage is generally covered under a fire insurance policy, and theft of property generally wouldn’t be excluded if there is full coverage, as full coverage typically implies protection against a range of risks including theft. These policy nuances highlight why natural disasters are often specifically excluded from standard coverage, making this option the most representative example of a common policy exclusion.