What does the term "Act of God" refer to in insurance contexts?

The term "Act of God" in insurance contexts refers to uncontrollable natural events causing damage. This includes events such as earthquakes, floods, hurricanes, or other natural disasters that occur without human intervention and are not preventable. In the realm of insurance, an Act of God is significant because it typically delineates the types of losses covered under a policy. Insurers often specify conditions under which certain natural events are covered, and understanding this terminology is crucial for both policyholders and insurers alike.

By recognizing an Act of God as something beyond human control, the insurance industry acknowledges the need for specific coverage provisions for such events. This distinction plays a vital role in determining the claims process, the scope of coverage, and the liabilities of the insurer versus those of the insured.