Act of God in Insurance: What Does It Mean Legally?

Apr 20, 2022

Historically, many insurance policies would have had an act of God clause in their policy wording. But this is less common these days, with insurers preferring to use more specific clauses defining what events are and aren’t covered by an insurance policy rather than relying on broad terms such as ‘act of God’.

However, there is still some confusion about what insurance policies will cover, particularly when it comes to natural events such as storms and floods.

Here we explain what an act of God is, what isn’t an act of God, and how to be clear about what you are and aren’t covered for when taking out an insurance policy.

What is an act of God in insurance?

The Association of British Insurers (ABI) define an act of God as

‘An event that is not the fault of any individual, such as a natural disaster.’

They tend to be uncontrollable, unpredictable, and unpreventable.

Examples of events which can be thought of as an act of God can include storms, flooding, earthquakes, or tornadoes amongst others.

What isn’t an act of God?

If we consider that an act of God can be thought of as an event that fault cannot be attributed to an individual for and is naturally caused, then you can think of the opposite in terms of what is not considered an act of God.

Events which are caused by a person or events that could have been anticipated or prevented are typically not considered to be an act of God.

For example, a house fire or a burst pipe wouldn’t typically be considered acts of God.

What happens to your insurance if you are affected by an act of God?

The ABI state that very few insurers contain general exclusions for acts of God in their policy wordings.

Instead, the wording of your policy will set out the events that you are and aren’t covered for and the key exclusions that apply to your cover.

If you are impacted by an event which is covered by your policy, regardless of whether it is an act of God or not, then you will be insured in accordance with your policy terms and conditions.

For example, whilst a storm can be considered an act of God, many insurance policies will provide cover for damage caused by storm related events.

It is also important to remember that insurers will also consider risk factors linked to your individual circumstances. For example, if you live in an area regularly impacted by flood events then you may find it more difficult to obtain insurance at a reasonable price as there is a high risk that you will be impacted by a flood event.

If you are impacted by an event which is excluded under your policy, then you will not be covered.

How to find out what you are and aren’t covered for

The best way to find out what you are or aren’t covered for is to thoroughly read through your policy wording and your policy terms and conditions before taking out your insurance policy.

It is vital to know what you are covered for and the limits which will apply to ensure that you do not find yourself in a position of being either not insured, or underinsured.

And with more extreme weather events becoming a part of our lives due to climate change, we may find in the future that obtaining insurance for certain risk becomes more difficult. Schemes such as Flood Re are designed to help households at risk of flooding access insurance cover. But there is not an equivalent for commercial properties at risk of flooding which can make commercial insurance solutions either extremely expensive or simply unavailable.

Are there any areas which are always not insured?

Yes. Most insurance policies will contain exclusions for risks such as radioactive/chemical/biological causes or war risks for example.

There are other areas which are not typically automatically provided such as cover for terrorism, cybercrime and pandemic events. However, many insurers will offer the option to add these types of cover to a policy. And this brings us back to the importance of understanding exactly what the cover you are buying includes or excludes.

If you work with an insurance broker, then they will be well placed to run through the policy wording with you and to help you understand the cover that you are indeed taking out.

Insurance brokers like our team at Anthony Jones are experts in insurance and have a firm grip of the language used by insurers and the finer details of the insurance policies which are available to you. And for commercial insurance solutions, an insurance broker may be best placed to discuss your insurance requirements and risk management strategy with an insurer. So, whatever your insurance needs do get in touch with us at Anthony Jones and our teams will be more than happy to help.

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