What Does the Insurance Company Consider to be an Act of God?

Published on June 4, 2024, by Law Office of Matthew L. Sharp

Insurance Bad Faith Disputes

What does the insurance company consider to be an Act of God

Insurance policies frequently use the term “Act of God” to describe events or circumstances that are an act of nature, or an event that wasn’t initiated by human activity.

But what does the insurance company consider to be an Act of God?

Let’s take a closer look.

Defining an “Act of God”

An Act of God, also known as force majeure, refers to events that are unforeseeable and beyond human control. These events are typically natural disasters or extreme weather phenomena such as earthquakes, floods, hurricanes, tornadoes, lightning strikes, and wildfires.

Essentially, they are occurrences that humans cannot prevent or mitigate.

Understanding what constitutes an Act of God is crucial because it often determines liability in legal and insurance contexts. When an event is deemed so, it relieves parties from liability for damages or losses resulting from that event.

This exemption can have significant implications for insurance claims and coverage.

Examples of Acts of God

To grasp the concept better, let’s explore some common examples of Acts of God:

  • Natural Disasters: Earthquakes, hurricanes, tornadoes, floods, volcanic eruptions, and tsunamis are classic examples. These events are sudden, catastrophic, and beyond human influence.
  • Extreme Weather Events: Severe storms, lightning strikes, hailstorms, blizzards, and wildfires are considered Acts of God when they cause damage or destruction due to their intensity or unpredictability.
  • Biological Phenomena: Outbreaks of diseases, pest infestations, and plagues can also fall into this category if they occur on a large scale and are beyond human control.

Understanding Insurance Coverage

In the realm of insurance, Acts of God often play a significant role in determining coverage and claim settlements. Most insurance policies include provisions that explicitly address these events and outline the coverage they provide.

Exclusions and Limitations

While insurance policies may cover certain Acts of God, there are often exclusions and limitations to consider. Some policies may exclude specific events or have limitations on coverage for certain types of damage.

Also, some types of damage may still be covered even if fall under this heading. Let’s look at Hurricane Katrina, as an example:

Hurricane Katrina caused an estimated $41.1 billion in insured damage and 1.7 million claims across six states in 2005. A judge ruled that the flooding in New Orleans was an act of negligence, not an act of God because the U.S. Army Corps did not properly maintain flood defenses.

However, a U.S. District Court for the Eastern District of Louisiana ruled that a category 4 or 5 hurricane is an act of God that can prevent a marina owner from filing a tort claim against a vessel owner, as no human negligence was involved.

Nevada recognizes “Acts of God” as a legal precept.

Mitigation and Preparedness

While these events are by definition beyond human control, there are steps you or your business can take to mitigate their impact and prepare for such events.

Mitigating the impact of Acts of God in your insurance policy involves several proactive steps:

  • Review Your Policy: Understand what types of Acts of God are covered and any exclusions or limitations in your policy. Ensure you have adequate coverage for potential risks.
  • Risk Assessment: Assess the specific risks in your area, such as natural disasters or extreme weather events, and tailor your coverage accordingly. Consider additional coverage options for risks not covered by standard policies.
  • Preventative Measures: Take preventive actions to minimize the risk of damage or loss from Acts of God. This could include reinforcing your home or business infrastructure, installing safety devices like storm shutters or smoke detectors, and landscaping to mitigate flood risks.
  • Emergency Preparedness: Develop and implement emergency plans to respond effectively to unforeseen events. This may involve creating evacuation plans, securing important documents, and assembling emergency kits. Be sure to maintain a current record of your assets as well, should you need to provide proof of loss following an accident.
  • Regular Maintenance: Keep your property well-maintained to reduce the likelihood of damage from these events. Regular inspections and maintenance of your home or business can help identify and address potential vulnerabilities.
  • Communication with Insurer: Keep your insurance provider informed of any changes to your property or circumstances that may affect your coverage needs. Promptly report any damages or losses covered by your policy.
  • Consider Additional Coverage: Depending on your location and specific risks, consider purchasing additional coverage options such as flood insurance, earthquake insurance, or umbrella policies to provide extra protection against natural disasters.
  • Stay Informed: Stay updated on weather forecasts, potential hazards, and any advisories or warnings issued by local authorities. Being aware of potential risks can help you take proactive measures to mitigate their impact.

By taking these proactive steps, you can help reduce the impact of natural disasters on your insurance policy and better protect yourself against unforeseen events, as well as alerting you to any potential breach of contract if an insurance claim is wrongfully denied.

Legal Considerations

Navigating legal considerations in an insurance dispute can be complex, requiring careful analysis of policy language, evidence, and applicable laws.

Seeking legal advice from experienced insurance attorneys can help policyholders understand their rights and options in resolving disputes effectively. Legal considerations in this type of insurance dispute can involve a number of key factors, like:

  • Interpretation: Courts may examine the language of the insurance policy to determine if the event in question falls within the definition of an Act of God.
  • Foreseeability: If the event was reasonably foreseeable or if there were warning signs that could have been heeded, it may not be considered a qualifying event.
  • Causation: Insurance companies may argue that the damage resulted from factors other than the event itself, such as poor maintenance or negligence, which could affect liability and coverage.
  • Policy Provisions: Policyholders must demonstrate that the event falls within the scope of coverage outlined in the policy.
  • Burden of Proof: This may require providing evidence, expert testimony, and documentation to support the claim.
  • Good Faith and Fair Dealing: Insurance companies must handle claims promptly and fairly, while policyholders are expected to provide accurate information and cooperate with the claim’s investigation.

“Acts of God”, events or circumstances that are beyond human control, typically involve natural disasters or extreme weather phenomena here in Nevada. Understanding what constitutes an exemption is essential for insurance coverage, liability determination, and legal proceedings.

By being aware of these concepts and their implications, you can better prepare for and navigate the unpredictable nature of such events.

Have questions about your policy coverage, the status of a claim, or you feel that your insurance company is ignoring you, contact the Law Office of Matthew L. Sharp. We’re here to help you find answers and fight for justice.