Does your insurance policy have an “Act of God,” or “Act of Nature” provision?

An “Act of God” or “Act of Nature” provision generally refers to those “events outside of human control, like flash floods, earthquakes or other natural disasters.” While these provisions are admissible in several forms of contracts, they are not generally allowed in others.

In some contracts an “Act of God” or “Act of Nature” provision may essentially get one party off the hook, while the other is left without an option for recovery. Louisiana civil code provides that an “Act of God” provision or defense will excuse the discharge of a duty and relieve [one party] from liability for injury to another…” These type of provisions are generally not allowed in insurance contracts.

Although rare, these provisions do show up in some insurance contracts. When used in insurance contracts these provisions “pertain to limiting the variable, like types of damages, timing and extents of coverage.” Stated more specifically, Insurance companies use these provisions to limit making payments, often times after major events like wildfires, earthquakes, floods or hurricanes. Obviously all of which can be very problematic for home and business owners.

In Lieu of recent natural disasters, the Louisiana Department of Insurance (LDI) has expressly taken a stance on similar provisions in insurance contracts. WAFB reports that the LDI has stated “insurance companies cannot cancel, refuse to renew, or increase the amount of a premium on a homeowners’ policy based solely on damages caused by severe weather.”

Therefore, it is very important to take a thorough look into your insurance policies to determine if your policy is subject to any such provisions. Insurance Commissioner Jim Donelon cautions everyone to “check your homeowners and business insurance policies for coverage limits and deductibles.”

The LDI urges any customer who believes their insurance company is not properly handling their claim to file a complaint directly on the LDI’s website. The website is listed as:

https://www.ldi.la.gov/onlineservices/ConsumerComplaintForm

 

Sources:

https://www.hg.org/legal-articles/legally-speaking-what-is-an-act-of-god-31732

 

https://www.wafb.com/2019/04/28/insurance-companies-cannot-alter-premiums-due-severe-weather-damage/

 

Southern Air Transport v. Gulf Airways, Sup.1949, 215 La. 366, 40 So.2d 787.