What is an "act of God" concerning insurance policies?

An "act of God" in the context of insurance policies refers to natural events that occur without human intervention and are beyond human control, which can lead to significant damage or loss. This includes catastrophic occurrences such as hurricanes, earthquakes, floods, tornadoes, and other similar natural disasters. These events are typically unpredictable and cannot be prevented, hence they qualify as acts of God.

In many insurance policies, these events are often specifically mentioned within the coverage or exclusions section. Depending on the policy, an act of God might be covered, or it may be excluded, necessitating the policyholder to understand their coverage limits carefully. For instance, while standard homeowners insurance may cover certain damages from a hurricane, flooding could require a separate flood insurance policy.

Understanding the precise definition of such acts is critical because this influences the risk management strategy for individuals and businesses alike, as well as their decisions when selecting insurance coverage.