Acts of God in the Insurance Industry

TABLE OF CONTENTS

INTRODUCTION

1

SECTION 1: UNCONTROLLABLE PERILS AND OTHER NATURAL DISASTERS

6

AN ACT OF GOD IN INSURANCE: WHAT IT IS

7

“DAMAGES THAT COULD NOT REALISTICALLY HAVE BEEN PREVENTED”

10

AN ACT OF GOD IN INSURANCE: WHAT IT IS NOT

11

THE COVID-19 GLOBAL PANDEMIC: AN ACT OF GOD, A FORCE MAJEURE EVENT, OR NEITHER?

12

THE COVID-19 GLOBAL PANDEMIC: TO RECEIVE COVERAGE OR NOT TO RECEIVE COVERAGE, THAT IS THE QUESTION

14

DECISIONS, DECISIONS

17

SUMMARY

18

SECTION 2: ACTS OF GOD IN HOMEOWNERS AND AUTO INSURANCE

19

ACTS OF GOD IN HOMEOWNERS INSURANCE

20

HO-1: BASIC FORM

22

HO-2: BROAD FORM

26

HO-3: SPECIAL FORM

32

ACTS OF GOD IN AUTO INSURANCE

42

COLLISION AUTO INSURANCE

43

COMPREHENSIVE AUTO INSURANCE

45

DECISIONS, DECISIONS

48

SUMMARY

49

SECTION 3: PRACTICAL STEPS FOR INSURERS, POLICYHOLDERS, AND INSURANCE AGENTS

50

ACTS OF GOD: PRACTICAL STEPS FOR EARTHQUAKES

52

PRACTICAL STEPS FOR INSURERS: OBTAIN PARAMETRIC INSURANCE

52

PRACTICAL STEPS FOR POLICYHOLDERS: PREPARE FOR AN EARTHQUAKE

53

PRACTICAL STEPS FOR INSURANCE AGENTS: CLEARLY EXPLAIN COVERAGE OPTIONS

54

ACTS OF GOD: PRACTICAL STEPS FOR WILDFIRES

55

PRACTICAL STEPS FOR INSURERS: UNDERSTAND REINSURANCE OPTIONS

55

PRACTICAL STEPS FOR POLICYHOLDERS: PREPARE FOR A WILDFIRE

56

PRACTICAL STEPS FOR INSURANCE AGENTS: CLEARLY EXPLAIN COVERAGE OPTIONS

59

ACTS OF GOD: PRACTICAL STEPS FOR HURRICANES AND FLOODS

59

PRACTICAL STEPS FOR INSURERS: UTILIZING REINSURANCE SOLUTIONS

60

PRACTICAL STEPS FOR POLICYHOLDERS: PREPARE FOR A HURRICANES AND FLOODS

61

PRACTICAL STEPS FOR INSURANCE AGENTS: CLEARLY EXPLAIN COVERAGE OPTIONS

63

DOCUMENTATION

64

COMMON MISTAKE THAT COULD BE AVOIDED WITH PROPER DOCUMENTATION

66

1. The Failure to Maintain Appropriate Coverage

66

2. The Failure to Correctly Explain Coverage

68

3. Administrative Errors

68

4. The Failure to Identify Exposures

68

5. The Failure to Share or Make Policy Changes

69

6. The Failure to Send Accurate Client Information

70

DECISIONS, DECISIONS

70

SUMMARY

71

COURSE REVIEW

72

SECTION 1: UNCONTROLLABLE PERILS AND OTHER NATURAL DISASTERS

72

SECTION 2: ACTS OF GOD IN HOMEOWNERS AND AUTO INSURANCE

74

SECTION 3: PRACTICAL STEPS FOR INSURERS, POLICYHOLDERS AND INSURANCE AGENTS

75

REFERENCES

76