Many insurance policies contain an act of god clause, but what exactly is an ’act of god’ and what does this mean for your cover?
Most would call an act of god a divine intervention, or a miracle that you cannot explain. However, in the world of insurance, companies describe an act of god as an event that could not be predicted or prevented. This might include weather phenomenon that are hard to predict, such as tornadoes and hurricanes, or volcanic eruptions such as the 2010 eruption of Eyjafjallajökull that caused widespread travel chaos and left many people stranded across the world.
Some insurers protect themselves from these unforeseeable events, by including a clause that means they will not pay out in the event of an ‘act of god’.
So how do you make sure you’re not left footing the bill because the man upstairs threw some bad weather your way.
What Is An Act Of God?
Insurance policies are based on risk. Where risks are predictable, for example, a house fire, a burst water pipe, a burglary or a car accident, then insurers find it easier to calculate these risks and provide cover.
When it comes to rare and unpredictable events, such as floods and extreme weather, then insurers find it hard to calculate this risk, leaving them in a position where they could be forced to make a substantial payout.
To protect themselves from making a hefty payout as a result of one of these rare natural events, insurers include an act of god clause within their policy. This is usually an exclusion clause that removes cover for natural disasters.
Understanding what counts as an act of god and whether your insurance policy includes or excludes cover for this is important.
How Does This Affect My Insurance?
Ordinarily this clause would not affect you. When you take out an insurance policy, you are asked a variety of questions to let the insurer determine the amount of risk your home faces. If you answer these questions honestly, there should be no reason for your insurer not to provide sufficient cover for all risks your property faces, including those that might be considered ’acts of god’.
For instance, if you live on a floodplain and inform your insurer of this, they should have calculated the risk of flooding and provided cover for the event of a flood.
How Can I Protect my Home?
The first step to ensuring your home is protected in the event of an ‘act of god’ is to understand exactly what you are covered for before signing up for your policy.
This means meticulously going through your policy documents at the time of request or renewal, and making a note of anything you don’t understand. This includes any vague wording, especially when it comes to an act of god.
Speak to your insurer about any confusion, and get clarification on exactly what you are insured for. If you believe you are at risk from a natural weather phenomenon (usually flooding), it is important that your insurer is aware, and has factored it into your insurance.
People can be caught out by the act of god clause if they do not know what it is, which can lead to being left to foot significant repair bills. When requesting or renewing a home insurance policy it is important that you understand exactly what is covered and what is excluded (including freak weather disasters).
For more information on the act of god clause, you should consult your insurers in the first instance. If you have been unfortunate to suffer a fire, flood, storm or water damage at your property and believe you have been wrongly denied an insurance claim, please contact Tangible Building for help on0800 328 4188.