It doesn’t take long when watching the news to hear about the latest natural disaster affecting the world. Although these unexpected events can seem far away and unlikely to affect you, natural disasters can take many forms and affect the population far more than most people realize.
When an act of god occurs, not only do people often lose their homes and their possessions, but they may be out of work, permanently displaced, and dealing with complex legal claims.
If you’re the victim of a natural disaster, what options do you have?
Legal Term: Act of God
Otherwise known as an “Act of Nature,” Black’s Law Dictionary defines this term as: An overwhelming, unpreventable event caused exclusively by the forces of nature, such as an earthquake, flood, or tornado.
First things first, take an inventory.
Immediately following the disaster, you’ll want to make sure you and your family are safe first and foremost. Once you’ve met your basic survival needs, your next step is to take an inventory of what was lost or destroyed. Not only can this help you make your claim down the road, but it will also help you identify crucial things that need to be replaced right away, like prescriptions or important documents such as social security cards and insurance policies.
FEMA DISASTER RELIEF
If you are in a federally recognized disaster area, this will also be the time to submit a claim to FEMA for disaster relief. FEMA only provides assistance to repair things that are the direct result of a disaster and only that will make the house “safe and sanitary” again, as opposed to paying for improvements. FEMA claims can be complex and may require an appeal if your claim is denied. However, if your claim is approved, FEMA can provide some crucial assistance while you sort out your options to recover damages.
Have insurance? That doesn’t necessarily mean you have coverage.
It’s always a good idea to carry plenty of insurance but sometimes hindsight is 20/20. If the cause of the natural disaster truly was an act of god beyond what anyone could control, it is likely that FEMA assistance and insurance coverage are your only options to recover any of the damages you suffered.
Unfortunately, questions of act of god insurance coverage are never that simple. Every policy is written differently and each one can include or exclude various claims based on the nature of the claim, whether it is bodily injury or property damage, as well as the cause of the claim. It is a good idea to be in contact with your insurance company quickly after the disaster so you can understand what you need to submit and the timeline for making your claim.
YOUR AGENT IS YOUR FRIEND
If you work with an agent, this person can be your main point of contact. However, whether your claim is covered or not will likely involve some investigation. For example, even if your claim was caused by something that seems obviously covered like a tornado, if your damage was caused by a projectile that flew off your neighbor’s porch when it should have been secured, your claim could be denied.
Essentially, your insurance company will be looking to see whether an act of God caused the damage or another person could have prevented it. Even if some of your damage is covered, you may only get the replacement value of your possessions and not other damages, like time missed from work.
Can you sue for an act of God?
Much like insurance coverage, suing after a natural disaster can be tricky. After you’ve lost so much in an act of god, it can be difficult to remember that just because you were unfairly damaged does not mean you will always be able to recover. If you don’t have insurance coverage for your loss, your other option is to pursue damages through a lawsuit.
However, to file a lawsuit you must have evidence that someone else caused your damages or at least failed to prevent them. An example of this could be a boat that wasn’t properly secured during a hurricane and came loose, damaging other boats. Your insurance might not cover the hurricane related damage, or perhaps it denied coverage because something besides the act of God was partially at fault. In this case, you could file a claim against the boat owner for the damages caused when the boat came loose, even if it was made worse by the hurricane.
These legal issues can be complex and involve difficult questions of negligence and liability. At attorney can help you identify these issues and negotiate with the insurance company and anyone else responsible to try to maximize your recovery for anything you lost.
At least there’s a tax break!
Regardless of whether insurance covers your loss or someone else is ultimately responsible, you may still be eligible for a tax break if you’ve been the victim of a natural disaster. It’s always a good idea to seek professional tax advice from an accountant, but generally you will be able to write off losses caused by a federally recognized disaster if you don’t recover those damages through insurance or a lawsuit.
Otherwise known as the “casualty loss deduction,” this write off will look at the amount of the loss, anything you recovered, and your gross income. You will be able to deduct that amount from your income the year of the disaster or in some cases, the year before. A tax professional can walk you through your options.