Understanding Your Policy

When is damage considered an "Act of God"?

Although the phrase "Act of God" is rarely used in home insurance policies these days, the concept still applies. An "Act of God" limits the liability for damage due to natural phenomena and freak occurrences that cannot be prevented by foresight or caution.

This is why it is important to check which perils are covered and which are excluded from your homeowners policy. In certain instances, you may purchase additional coverage for an excluded peril.

For example, it may be prudent to obtain additional flood insurance if you live in a flood-prone area where the likelihood of a loss due to a flood is high.

Common Act of God Exclusions

Hurricanes and Hail-- Losses from a hurricane or severe wind/hail storm are often covered by insurance (except for losses associated with flooding), but there may be wind damage deductibles to mitigate the high risk from these catastrophic events.

Earthquakes-- Damage from earthquakes is likely not covered, as earthquakes are not included in standard homeowners policies. If you live in an older home or in an area that is susceptible to liquefaction, you may want to opt for additional earthquake coverage.

Floods-- Losses that result from water damage due to a flood or sewer backup are typically excluded. If you live in a floodplain where flooding is a possibility, you may be able to purchase separate flood insurance.

Sinkholes-- Classified as "earth movement," sinkholes (including those caused by old mines) cause damage that is typically not covered. This includes those caused by old mines. However, some state laws require optional sinkhole coverage from insurers.

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