Under what circumstance would a policy not cover damages?

The circumstance under which a policy would typically not cover damages is when the insured was conducting illegal activities. Insurance policies are designed to risk pool and cover losses that occur under lawful conditions. When an insured engages in illegal activities, it fundamentally conflicts with the principles of insurability. Insurance contracts are based on trust and good faith, and indemnifying someone for losses incurred while committing illegal acts would not only contravene public policy but also undermine the ethical foundations upon which insurance operates. As a result, many policies specifically contain exclusions for incidents arising from illegal acts.

In contrast, the other circumstances mentioned could lead to complications in coverage, but they do not inherently void the contract in the same way. For instance, not reporting a claim within a designated timeframe generally addresses procedural compliance and could lead to denial on procedural grounds rather than outright exclusion of coverage due to illegal activity. Similarly, if a property is not insured at the time of loss or the insured does not own the property, these situations could create issues regarding the appropriateness of filing a claim, but they do not introduce the same legal and ethical implications as engaging in illegal activities.