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Exceptions indicate a broken contract
The examples above should give you a feel for when you would want to throw an exception instead of using some other means to communicate an event. One other way to think about exceptions, which may give you more insight into when you should use them, is that exceptions indicate a "broken contract."

One design approach often discussed in the context of object-oriented programming is the Design by Contract approach. This approach to software design says that a method represents a contract between the client (the caller of the method) and the class that declares the method. The contract includes preconditions that the client must fulfill and postconditions that the method itself must fulfill.

Precondition
One example of a method with a precondition is the charAt(int index) method of class String. This method requires that the index parameter passed by the client be between 0 and one less than the value returned by invoking length() on the String object. In other words, if the length of a String is 5, the index parameter must be between 0 and 4, inclusive.

Postcondition
The postcondition of String's charAt(int index) method is that its return value will be the character at position index and the string itself will remain unchanged.

If the client invokes charAt() and passes -1 or some value length() or greater, the client has broken the contract. In this case, the charAt() method can't do its job correctly, and it signals this to the client by throwing a StringIndexOutOfBoundsException. This exception indicates that the client has some kind of software bug or has not used the class correctly.

If the charAt() method finds that it has received good input (the client has kept its part of the bargain), but for some reason is unable to return the character at the requested index (unable to fulfill its end of the contract), it would indicate this condition by throwing an exception. Such an exception would indicate that the method has some kind of bug or difficulty with runtime resources.

So, if an event represents an "abnormal condition" or a "broken contract," the thing to do in Java programs is to throw an exception.