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

The term "act of God" in insurance refers specifically to natural events that occur independently of human influence or control. This includes occurrences such as hurricanes, earthquakes, floods, and tornadoes—events that can cause damage or loss but are typically not predictable or preventable by humans. In the context of insurance, these acts are often considered unforeseen events that can provide grounds for claims under specific policies, as they are not caused by human actions or negligence.

This terminology is important for both insurers and insured individuals because it helps delineate what types of natural disasters are covered under standard insurance policies. Understanding the definition of "act of God" is crucial for policyholders as it can have significant implications for coverage limits, exclusions, and claims processing. Events classified as acts of God may often be excluded from coverage in certain policies, depending on the terms set by the insurance provider.