How does "act of god" clause work in the following?

Question

A new reinforcing system for building frames increases wind-resistances of the buildings from 85mph to 120 mph, and costs around the same to build the property owners building with. The property owner is aware of the new reinforcing method, but the Building Contractors all refuse to grant the property owner's requests, and constructs the buildings with 85mph resistant frames, which get knocked down by a tornado/hurricane before the Building Contractor's warrantee expired.

How would the "act of god" clauses in the Building Contractor's warranties and the building owner's insurance company's policies work in this realistic scenario?

Answer 1

You don't state what the "act of God" clauses ARE in the building contractor's warranties.  

But I can tell you, there ARE no act of God clauses in an insurance policy.  It's not an insurance phrase.  

There would be discounts on the wind premium, potentially, if the stronger materials are used.  But as long as the building is up to local code at the time of construction, the difference in materials would only effect rates, not coverages.

Answer 2

The "act of god" is the tornado/hurricane which knocks down the building.   Most insurance companies cover acts of god within the terms of their policies.  Generally, contractors are not held accountable for acts of god as their contracts defer that liability to the insurer.  

I think you are looking for negligence on the part of the contractors since better building materials were available, but the contractors refused to use them.  

It would be a lengthy and costly lawsuit as you would have to prove the velocity of the wind was less than the 125mph when each building was knocked down; and, also, the difference in damages caused to each building between an 85 mph and 125 mph wind.

So, you would have to figure 3 variables:

1.  How much damage was caused by 85mph winds?

2.  How much damage was caused by 86 to 125 mph winds?

3.  How much damage was caused by those winds in excess of 125mph?

Only then could you access how much each owner was damaged by not having the better framing system.  Or, how much damage the new system could not prevent.

Answer 3

Wind would be a covered peril in the homeowners or commercial property policy.  The owners insurance will pay for the damages caused, less the deductible and if the insurance company feels that there was any fault on the part of the contractor, they would subrogate against him.  But, they would have to know in advance that there was a "better" building system that was available and approved by city building codes.  If the building practices were still "experimental" at the time of construction, I doubt they would find fault with the builder.

Answer 4

Sorry, but I just have to say this.......There is no "act of God" clause in any insurance policy that I have read.

There might be in the warranties you talk about, but not in any insurance policies. I have been a claims adjuster for 20+ years and have read dozens of policies and have never seen it anywhere.