Jason has bought a speed boat to be used for pleasure during holidays. He informed his insurance company in order to obtain coverage but was told that the speed boat was excluded as a personal property under his householder insurance policy.

a. Explain the rationale of the insurance company for excluding certain types of property, such as the speed boat, under the householder insurance policy. 3 Marks

b. Other than the reason you suggested for 2(a) above, identify and explain two additional reasons for inserting exclusions or exceptions in insurance policies.4 marks