You may have heard the term “force majeure” being discussed in conversations about insurance. You might have been wondering what it means and why people were suddenly speaking French! In this article, we’ll explain what force majeure is. We’ll also explain how it relates to insurance and if it’s something you need to worry about.
Force Majeure definition
Force majeure is an event that happens outside of your control, including natural disasters, civil unrest, and any other unforeseeable event that could harm you or your property. Force majeure literally translated means “superior force.” It is sometimes referred to as an “act of God.”
A force majeure clause can be included in a contract. One of the parties in the contract might not be able to execute their responsibilities because of extraordinary or extreme circumstances. The force majeure clause can allow them to be released of liability.
How force majeure applies to insurance
In Canada, it’s not likely you’ll hear your personal insurance broker talk about force majeure or acts of God. Your insurance policy should be very clear on the things that are and are not covered. If there is any ambiguity, or if you are not sure if something is covered, ask your insurance broker for clarification.
Depending on the level of insurance coverage you have, you could be covered for things like:
- Fire
- Smoke damage
- Theft
- Weather damage
- Water damage
Here are some extreme circumstances where you would probably not be covered by your insurance company:
- War
- Nuclear bomb
- Zombie attack
- Sanctions from a foreign government
If you’re like most Canadians, you probably have insurance to protect your home and car. If this is the case, force majeure is not something you need to worry about. Read your insurance documents to fully understand what is and isn’t covered under your policy. If you don’t understand, call your insurance broker and they will be happy to explain.
How force majeure applies to home insurance
A typical home insurance policy can cover things like fire, damage from weather, theft of your belongings or burst pipes. If an incredibly unlikely event causes damage to your home, such as aliens invading earth and using your home as a nightclub, your insurance might not cover it. Carefully read your policy and talk to your broker to determine what is and isn’t covered.
How force majeure applies to car insurance
A typical car insurance policy can cover things like fender benders, more serious accidents, vandalism and theft. You can also be covered in the event of a lawsuit, and for any medical bills that result from a car accident. If an incredibly unlikely event causes damage to your car, it’s possible your insurance will not cover it. For example, if your car develops a mind of its own like the flying car in Harry Potter and disappears into the Forbidden Forest, you may not be covered. Carefully read your car insurance policy to determine what is and isn’t covered. If you have any questions, talk to your insurance broker.
Talk to an insurance expert about force majeure
Keep in mind that insurance exists to protect you and your assets. Reputable insurance companies want to help you in the event of a claim. There are some circumstances where you may not be covered. However, if you carefully read your insurance documents and understand the limits of your policy, you can avoid any surprises.
Do you still have questions about force majeure and insurance? Give us a call! Our brokers are experts in all things insurance, and they would be happy to answer your questions. You can give us a call, find us online, or visit one of our community branches.
What is force majeure in insurance FAQs?
Are all insurance policies subject to force majeure clauses?
Every insurance policy is different. The coverage you get depends on your assets and the level of coverage you decide to purchase. There will always be limitations to the coverage. To understand what is and isn’t covered in your policy, carefully read your insurance documents. If you have questions, contact your insurance broker.
