What is an Act of God?
An Act of God is a legal term used in insurance and other industries to describe natural events outside human control, such as floods, earthquakes, hurricanes, or tornadoes. These events are unpredictable and typically cannot be prevented by human intervention. In the context of property and homeowners insurance, Acts of God can cause significant damage, and whether or not these damages are covered by an insurance policy often depends on the specific terms and coverage limits.
In many cases, standard insurance policies exclude coverage for damage caused by Acts of God, particularly floods and earthquakes, which may require separate policies or riders. For example, a homeowner’s insurance policy may cover damages caused by wind during a hurricane but exclude flood damage unless the homeowner has a separate flood insurance policy.
An Act of God can also disrupt businesses’ operations, and depending on the cause of the disruption, business interruption insurance may offer some relief. Understanding what is and isn’t covered in the event of an Act of God is crucial for both personal and business insurance policyholders.