Which of the following is commonly excluded in insurance contracts?

In insurance contracts, specific perils are often excluded to manage risk and ensure that premiums remain affordable. Earthquakes are commonly excluded because they represent a significant financial risk that can lead to catastrophic losses, making it challenging for insurers to cover these claims within standard policies. Instead, specialized coverage known as earthquake insurance is usually offered as an endorsement or a separate policy, allowing insureds to decide whether to purchase this additional protection.

Auto accidents, fire damage, and theft are typically covered under standard insurance policies, such as auto or homeowners insurance, respectively. The exclusion of earthquakes reflects the unique and unpredictable nature of seismic events and the historically high cost of claims resulting from them. This practice helps insurers maintain financial stability while still offering clients the option to protect themselves from natural disasters.