What is an Act of God?
Acts of God are defined by insurance providers as events that no amount of reasonable human foresight could have foreseen or avoided.
According to insurance providers’ “Act of God” defense, there are certain factors they reasonably shouldn’t have to contend with when evaluating you for coverage. Since they are unreasonable, insurance companies shouldn’t be expected to pay in the unlikely event of such acts occurring. They can contend that based on where you live (such as a desert climate and the home is damaged by flood) or the nature of the event (a meteor strikes the home and the hole left behind results in water damage) that their coverage should not extend to such improbable events. As it relates to home insurance, an act of God can be a fairly all-encompassing term or a very restrictive term depending on your policy. It isn’t enough to simply purchase homeowners insurance, you have to do your due diligence on the policy, understand its finer points to truly have the security your family and financial well-being depend on. The information below can help you identify the general details of a policy but more importantly, it should provide you the right questions to ask when selecting one based on your individual circumstances.
Basic/Broad Events that are Generally Covered on Most Policies
Many policies consist of basic or broad coverage that protect against damages by events that are unlikely to occur but foreseeable and reasonable. Examples of these include: Fire, Lightning, Explosion, Smoke, Wind/Hail, Falling Objects (such as a tree falling on your house), Weight of Ice and Snow, Water Damage (Non flood or ground water), and Sinkholes. What you’ll notice from that list, is that none of those events is easily forecasted and also have little to do with the specific region of your home. Unlike a flood in the desert or a meteor crashing down on your roof, these Acts of God are unlikely but they all represent reasonable risks to most homes that an insurance provider would likely cover in some capacity.
When You’ll Need a Rider for an Act of God
Other events that cause damage in nature can be more predictable or likely to occur based on your home’s location and often times are only carried under separate policies outside the primary insurance coverage. These acts of God include Hurricanes, Tornadoes, Earthquake, Floods or Ground Water Damage, and Volcanic Activity. Those who live in areas with regular activity from one or any number of these potentially catastrophic events will want to purchase additional coverage to protect against their destructive forces. It’s important to remember that insurance companies are in business for the same reason as every other enterprise, to make money, not spend it. If a particular event represents too large of a risk in your area to the insurance company, they aren’t likely to cover that event in a standard policy. They are however likely to offer coverage as a rider to be purchased in addition to the basic/broad coverage.
Common Misconceptions
The two most common misconceptions about acts of God is that they are either never covered in a policy or always covered. For those who believe the former, they may delay in contacting their provider thinking the damage from such an event is excluded. This delay could lead to additional damage that may not be covered under your policy and you’ll be forced to cover the repairs yourself. The latter misconception can be just as costly. Not carrying adequate and appropriate coverage for your area when certain events are possible is a dangerous financial game. Certain riders can seem costly but when weighed against repairing your home after an act of God, they represent tremendous value. Knowing the details of a policy, discussing your options with a licensed agent, and asking the right questions at time of purchase regarding acts of God are all paramount in keeping you, your family, and your financial well being safe. Check with your provider, such as Insurance Land to be aware of your coverage.
