How Insurance Covers Acts of God
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"Acts of God" are sudden, unexpected events that can't be controlled or prevented. Acts of God insurance covers these events. When it comes to car insurance, acts of God insurance sometimes refers to comprehensive coverage. For homeowners insurance, you're protected against some acts of God (like wind) with a standard policy. But others (like flooding) require a special endorsement.
What is an act of God?
In insurance, an act of God refers to any event that occurs outside of human control and can't be predicted or prevented. Natural disasters such ase earthquakes, severe weather and floods are all considered acts of God. It also depends on the root cause of damage: A fire caused by poor wiring is not an act of God, but one caused by a lightning strike is.
Insurance policies don't use the phrase "act of God," though. Instead, the contracts describe specific events. Different types of insurance, such as car and homeowners, cover acts of God in different ways.
Are acts of God covered by automobile insurance?
Car insurance generally covers acts of God under optional comprehensive coverage. It pays for damage to your vehicle caused by anything other than a collision.
In addition to acts of God, comprehensive includes things like vandalism, fire and terrorism. So if you chose to include comprehensive coverage on your car insurance policy, you're protected from natural disasters and other unpredictable events.
Keep in mind that insurance companies will check for other causes of damage before paying out.
Are acts of God covered by homeowners insurance?
When it comes to homeowners insurance, coverage for acts of God is complicated. Like car insurance, homeowners policies don't use the words "acts of God."
Some natural disasters are covered, but others are not. Typically, damage due to wind, rain or hail is covered under standard homeowners policies. But damage from an earthquake, volcano or flood generally isn't.
The only way to find out if you're protected is to carefully read your policy and ask your insurance agent any questions.
The type of homeowners insurance policy you have will also affect what's covered. The most common type, called HO-3, insures the structure of your home for every cause of damage (or peril) except for things that are specifically excluded. However, if you have a more limited policy, such as an HO-1 or HO-2, you're only covered for the perils named in your policy and nothing else. There are also some other differences. For example, HO-1 policies do not cover damage due to the weight of snow, but HO-2 and HO-3 policies do
One final note: In cases where you're covered for natural disasters, your insurance company may look for other possible causes to determine whether to pay for the loss.
For example, if a wild animal damages your property, that would be covered. But if your neighbor's pet gets loose and causes damage, you may need to file a claim under your neighbor's liability coverage instead.
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