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Acts of god explained

'Acts of god' are frequently referred to in insurance policies, but what are they, and what do they mean for you?

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What is an 'act of god?' | What is an ‘act of god’ clause? | What does it mean for your insurance? | How to protect yourself

What is an "act of god"?

The term "act of god" refers to natural phenomena such as lightning strikes, hurricanes, tornadoes and earthquakes - large-scale, freak weather occurrences.

The phrase is usually used by insurance companies, and in other legal circles, to describe events that couldn’t have been predicted or prevented by any reasonable measures.

For example, when the Icelandic volcano eruption in 2010 delayed thousands of travellers’ journeys, many insurers refused to pay compensation under their act of god clauses.

What is an 'act of god' clause?

Tornado

Insurance policies often contain an act of god clause, which is designed to protect insurers from hefty pay-outs associated with such unpredictable events.

For example, if your house is damaged by a tornado, you may find that your insurer refuses to pay out.

Insurance rates are based on risk e.g. the risk of fire, or of a burst water pipe. Insurers are able to work out these risks because they’re much more common than a natural disaster.

Because these events are so rare and unpredictable, they are usually excluded from what insurers consider a “standard risk".

But being aware of what acts of god are and what they mean is an important part of understanding your cover.

What does it mean for your insurance?

Volcano erupting

It can be worrying to think that insures have a way out of their contract if your home is damaged by a natural disaster, but this is not generally how the clause is used.

Whenever you take out an insurance policy, insurers ask a lot of questions to try and determine the level of risk your home faces from certain events.

Your insurance costs will be based on this information, so insurers should always honour contracts where the risks were honestly reported.

It is usually only in extreme cases where an act of god clause is used.

How to protect yourself

An act of god is by definition entirely unpredictable, so there is usually very little or nothing you can do to avoid it in the first place.

But you can take certain steps to help make sure your insurer doesn’t try to get out of paying your claim.

When buying your insurance policy, it’s a good idea to check for supposedly freak events which are becoming more common in your area, such as floods.

If you live on a floodplain, check if floods are considered to be an act of god by your insurance company. Its cases like these where you might end up under-insured.

And, if you know that your house is particularly at risk from certain events, like floods or tornadoes, you should discuss what is covered with your insurer before you buy.

The definition of an act of god changes between insurers, so make sure you get as accurate a definition as you can.

Don't get caught out by vague wording. If the situations which constitute an act of god aren’t specifically defined in your policy, request clarification from your insurer.

Alternatively, you could follow in the footsteps of Betty Penrose who, in 1969, sued god for $89,000.

God was accused of "careless and negligent control of the weather", after her home was destroyed by a lightning strike. You can read more on that story here.

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Originally published December 2008



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Dave Rendell

Dave Rendell, digital marketing executive at Confused.com

Dave Rendell is a digital marketing executive at Confused.com, and has worked in insurance since 2011. When he's not at work, you'll usually find him up a ladder decorating, or under a car, tinkering.

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