The Term “Act of God Clause” is the most misinterpreted insurance company denial ever. I am going to try to give some explanations and examples on how this works and when it is used.
So, what exactly is an “Act of God”? Quite simply it is a cause of loss that is naturally occurring and was not caused by human influence. Some examples, wind, hail, tree being blown over. Some items that are not “Acts of God”. Car driving into house, trampoline flying because it was not tied down, baseball breaking neighbors window. To clarify if man touched it man probably did it or failed to do it properly when we are discussing insurance claims.
The ”Act of God” clause or denial most often comes up when a tree falls onto someone else’s property like their fence car, or house. The claim scenario usually goes like this, Neighbor A’s big oak falls onto neighbor B’s house during heavy rain and wind. Neighbor A says sorry and gives B his insurance information. B calls the insurance company they come out and see A’s tree on house and it is fully leafed appeared healthy and they tell B sorry “Act of God”, no coverage. “But it’s A’s tree!!!!!!” Rebuts B, “and tree was hollow.” Claims adjuster says sorry, there was no indication it was hollow and it was the result of nature.
Most people relay this story as “The insurance Company did not pay for the damage to MY house because it was an “act of God”.” This is where the information goes completely wrong and here is why. The correct statement is, “My neighbors insurance company said he is not liable for the tree that hit my house.” In other words the claim is being denied for Neighbor A’s liability, not the act of a tree falling on the house. Neighbor B’s insurance policy will absolutely pay this claim as a tree falling on the home is a covered peril. The claims adjusters denial is strictly saying neighbor A is not liable for “An act of God”, not that “Acts of God” are not covered.
I also through one little more piece of thought candy in my story above, “the tree was hollow”. How does this change the outcome? Well, in this case it does not, as the tree was fully leafed and appeared healthy. What if the tree was obviously dead? If it is June and we have no leaves we may have a negligence issue and suddenly the claim could be dramatically different. Which now leads us to a third option, the tree looks like it is dying, looks hollow but you can’t tell for sure. Who is responsible in this case?
In this situation it may depend on Neighbor B. Did neighbor B talk to the neighbor about the tree hazard? Did they send a certified letter with the concerns? If not the “act of God” clause may still protect neighbor A unless neighbor B can prove he was aware and simply ignored the situation.