What is an Act of God?
I worked for Travelers Insurance as an outside property claims rep from 2005-2008. We had extensive training before we were ever assigned our first claim. Two weeks learning how to read the policy, two weeks learning how to estimate damage and two more weeks learning the computer software used to complete the estimates!
At no point during that training did anyone discuss Acts of God.
Insurance policies are so technical. They are a contract that you and your insurance company agree on. The policy provides coverage for certain causes of damage and excludes coverage for certain causes of damage. Everything is very clearly defined. It’s your agents responsibility to explain any questions you have.
Having said that, let’s look at some causes of damage that could be perceived as an Act of God and if they would be covered or not.
Common Acts of God -Homeowners Policy
Hurricanes are typically covered as the real cause of damage is due to extremely high winds and heavy rain. The tricky part of determining coverage with a hurricane comes when there is mass flooding, like we saw from Katrina. What happened first, the house was demolished by wind or a flood?
WATCH OUT!! Some insurance carriers have special Hurricane Deductibles that could cost you tons!
A Homeowners policy excludes damage caused by ground water. So if your house has damage due to a flood, your Homeowners policy will NOT cover it. A Flood policy will cover it as long as the flood meets certain criteria (the flooding must encompass at least a certain amount of area before it is classified as a flood).
Covered. Basically it’s wind damage.
No coverage on a Homeowners policy, potential coverage on a Flood policy.
No coverage on a basic Homeowners policy BUT you can buy a separate Earthquake Insurance policy.
- Fallen Trees
Most likely the tree fell as a result of wind or weight of snow or ice. There is coverage as long as there is damage to your house. If a tree lands on your grass but doesn’t cause any damage than you are on your own. See this post for more information about trees. There may even be coverage to replace the tree depending on the reason it fell.
Covered. Be wary of fly-by-night contractors trying to scam you into getting a new roof or siding. Always discuss damage to your house with your agent first.
Basically, water from the sky is covered and water on the ground is not covered. Wind is covered but Earth Movement (including landslides and sinkholes) are not covered. In some cases you can add endorsements or buy separate policies that will provide coverage. Ask your agent if you are concerned about something in particular.
Auto Claims caused by Acts of God.
Provided you have comprehensive coverage, most if not all Acts of God would be covered. Fallen trees, earthquakes, flooding, hailstorm. All of these would be covered by your carrier provided you have selected Comprehensive coverage. Read this post for more information on when to delete Collision and Comprehensive coverage.
Please keep in mind, some policies may be different. You should ask your agent to verify everything I mentioned in this post.
Will Your Rates Increase because of a Claim?
Most major storms are considered Catastrophic storms. If you have a claim because of one of these storms than you have a CAT loss (claim). Most companies will not surcharge your policy due to a CAT loss.
If you shop your policy after a CAT loss than you may find the quotes are higher than they would have been if you didn’t have the CAT loss. Depending on your insurance company you may lose your Loss Free Discount, a discount on your policy you get for not having any recent claims.
Comprehensive coverage is also referred to as “Other Than Collision Coverage”. Any damage to your automobile caused by something other than an accident. Comprehensive claims should not affect your rate when the policy renews but could affect any quotes you get if you were to shop your policy.
What experiences have you had with damage caused by Acts of God?