What Does Exclusion Rider Mean?
An exclusion rider is an endorsement or provision in an insurance policy that lists the perils or hazards that the insurer will not cover.
Policyholders can purchase supplemental policies to fill the coverage gaps caused by these riders.
Insuranceopedia Explains Exclusion Rider
Policyholders should be aware of which perils or hazards their policy will not cover or they may face unexpected financial burdens from a non-covered loss.
For instance, a home insurance policy will provide some coverage for water damage. However, if it has an exclusion rider for damage from burst pipes, then the policy will not provide protection or compensation for water damage caused by a pipe bursting.
Certain kinds of flooding are also commonly excluded from homeowners and renters insurance policies. Those who purchase these policies need to carefully review any exclusion riders to make sure they understand what sorts of damages they will not be covered by the insurance policy and will, instead, have to be paid out of pocket.