“Acts of God” is a phrase that is probably familiar to you, but it is not something that gets talked about beyond the world of insurance very much. Those bizarre incidents that no one could predict and which are beyond human control bear the title “act of God.” But, even though no one is really to blame, there is still damage and it may not be clear whether this is the sort of thing that insurance will cover and, if so, to what extent. By learning how “acts of God” impact your car insurance, you’ll be in a much better place should something crazy ever happen to your car.
In this article, we’ll explain what an act of God is, go over how insurance works in these situations, and consider possible exceptions to general rules.
How “Acts of God’” Impact Your Car Insurance
Step 1: Know what an act of God is. To get a better idea of exactly what an act of God entails, think first of all of natural disasters and other tragedies.
Fires, earthquakes, explosion, sinkholes, falling trees, hurricanes, tornadoes, and other natural disasters are included. The list is potentially limitless, but this should give you a fair idea of what an act of God is.
Step 2: Understand how insurance works. Insurance is intended to protect you in exchange for a monthly fee, and the more coverage you have, the better protected you are.
The good news, first of all, is that insurance will cover these kinds of misfortunes. The bad news, perhaps, is that insurance will cover these only if you are covering comprehensive coverage. Basically, car insurance can be broken down into two distinct types: comprehensive and liability coverage.
Liability coverage deals only with those accidents in which you are to blame, hence the term “liability.” If you cut off another driver and cause a major accident, for example, your liability insurance would kick in if you were to blame, covering the damages to the other driver. Damages to your own vehicle when you are at fault will not be covered.
If you have comprehensive coverage, however, then damages to your own vehicle would be covered, even if you were at fault. Comprehensive coverage also generally includes coverage for adverse events like vandalism and theft, and this is where acts of God come in.
With your comprehensive coverage, most acts of God should be covered, unless there is some sort of positive exclusion of an event written into the terms of your insurance policy. If so, then this type of event would not be covered.
Step 3: Think about possible exceptions. The location where you have your car insurance will play a big part of what will and will not be excluded under this general rule.
The location matters because the part of the country you live in may have a certain tendency for some natural disasters over others. So, if you live in a region prone to flooding, then you may actually have to purchase add-on coverage for flooding.
While this might seem unfair, the truth is that the insurance company will need to pay extra for those affected by flooding, and if this happens routinely, then the insurance will lose money on a regular basis.
If you think that flooding, or whatever natural disasters happen near you, are something you need coverage for, then you may end up having to purchase it yourself. You might not like the idea of this, but you’ll definitely like it a lot better than losing a lot of money if something happens to your car.
But, for those acts of God that are simply unpredictable and happen without any regularity, your comprehensive coverage should keep you safe from financial harm.
It is impossible to foresee all the possible permutations of events that might someday occur, but the best way to protect yourself is to be aware of the different coverage options out there and what the best way to spend your money and protect your investment really is.