Acts of God: Everything you need to know
An act of God is usually considered as an event that is beyond the scope of human control. Unpredictable and unpreventable natural disasters such as floods, hurricanes, volcanoes, earthquakes, and storms are considered acts of God.
- Acts of God in Insurance
- 'Act of God' Natural Disaster Costs
- 'Act of God' in Relation to Tort Laws
- What to Consider
Acts of God in Insurance
Acts of God are natural catastrophes outside human control that are unexpected. They do not hold any religious value when it comes to insurance or business. Typical events include:
- Extremely high tides
- Lightning storms
- Volcanic eruptions
In contractual terms, the act of God-provisions is given as force majeure clauses that protect you from any liabilities that are outside human influence. They eliminate or limit liability for injuries, damages, or other losses related to natural catastrophes.
However, it is important to remember that not all insurance companies cover the same acts. The terminologies may also differ from one policy to another, and you will have to clarify what your insurance covers. The clause in a contract implies that no individual is liable for damages. However, it cannot be used as an excuse to avoid taking a reasonable amount of care to protect your property from damage.
'Act of God' Natural Disaster Costs
For example, an old building collapsed during an earthquake and caused injury to bystanders. The owner may claim it was an act of God, but the insurance company may deny the claim. There may also be no recourse in court as the owner did not take any precautions to maintain the structural integrity of the building.
Similarly, governments are also responsible for setting up measures to avoid any losses. If a poorly maintained dam bursts and causes a flood in a community, it will not be considered an act of God. A storm may have caused the water levels to rise, but the floods caused were due to the lack of action from the government.
'Act of God' in Relation to Tort Laws
Tort law is typically associated with personal injuries. An act of God may be considered the cause of a person’s injury and without the act of God, no harm would have occurred. In this case, the person accused of causing the injury may escape liability for damages.
For example, if a car driver is injured while driving, but the accident was caused by a tornado, then other drivers that may have hit the original driver or the car manufacturer can escape liability by claiming the tornado actually caused the accident.
What to Consider
Usually, all insurance policies offer covers for acts of God, and your insurer will reimburse you for any losses related to it. However, the precise decision may differ depending on your insurer, which can cause ambiguity when raising a claim. Here are a few things you can consider.
Prepare for anything
Make sure you get a clear idea of how the term "act of God" is defined in your insurance policy. Don't assume anything based on general definitions before purchasing a policy.
Add-ons and separate policies
Most times, your standard insurance policy will cover certain acts of God for you, but this may not always be the case. You may have to sometimes pay extra for an additional cover or buy a new policy altogether for certain cases like flooding, hurricanes, earthquakes, tornados, or lightning storms.
When taking out a policy, make sure you tell your insurer your level of risk. Also, a report which insurance covers you currently have and which ones you don't.
Read the fine print
Your insurance policy will always have various sections mentioning the specific circumstances that are not covered under your policy. Whether you are a home or business owner, it is important to know what you are entitled to in case of natural calamities. For example, if a disaster happened due to human activity such as faulty wiring, it may not be considered an Act of God.
Always have proof
If you do have to file a claim, ensure you have all relevant evidence to show that you took appropriate measures to prevent damages. For example, prepare proof to show flood prevention measures that you set up in your place, like building a door at an elevated level. Also, make sure you are aware of the preventive measures taken in your community.
In conclusion, acts of God are unpredictable events that cannot be controlled by us. These events not only damage material property and cause death but also leave behind emotional scars that last for a long time. However, by getting your assets insured, you can save yourself from a great deal of financial burden.