Puna residents who had hurricane insurance when Iselle blew through Hawaii island should be covered under their policies even though the high-powered disturbance was downgraded to a tropical storm when it made landfall.
When the storm weakened from hurricane strength to tropical storm conditions, some confusion arose as to whether damage would be covered under a hurricane policy or homeowner’s policy, said Zephyr Insurance Co. President Richard Toyama.
Toyama said in this case Tropical Storm Iselle, which came to shore at 2:30 a.m. on Aug. 7, would be treated by Zephyr as a hurricane in terms of insurance coverage. He said other hurricane insurers’ policies probably would have the same coverage interpretation.
"There was some misunderstanding whether it was a hurricane compared to a wind storm," he said. "It would be a hurricane as defined when the National Weather Service issues a hurricane watch or a warning. That’s when the hurricane policy coverage begins and it remains intact until 72 hours after it is lifted by the National Weather Service. Changes in the storm conditions would not impact the in-force hurricane coverage."
The National Weather Service declared a hurricane warning on Aug. 6 and it remained in effect until being lifted on Aug. 8. That means hurricane coverage remained intact until 72 hours after that date, or until Aug. 11, according to Toyama.
Many homeowners’ policies exclude hurricane coverage, so those without a companion hurricane policy would be uninsured for Iselle and thus liable for all the damage caused to their property.
Zephyr, with more than 70,000 customers and about 30 percent of the hurricane insurance market, is one of the top two insurers in Hawaii along with State Farm.
| WHEN A STORM COMES
Hurricane insurance coverage is activated when the National Weather Service declares a hurricane watch or warning, and the coverage remains in place until 72 hours after the watch or warning is lifted. For Tropical Storm Iselle, that means hurricane policyholders in Hawaii were covered Aug. 6-11. Damage incurred outside of that period, such as from strong wind when there is no hurricane designation in effect, likely would be covered by an individual’s homeowners policy.
Source: Zephyr Insurance Co.
IF YOU HAVE A CLAIM …
» Check for damage.
» Secure your property to prevent further damage (keep receipts for any materials used).
» Report your damage to your insurance company or agent (make a claim).
» Submit proof-of-loss forms or other claim forms if requested by your insurance company.
» Set damaged items aside for later review/inspection by your adjuster.
» Don’t begin permanent repairs until damage is inspected by your adjuster or you are told to do so by your insurer.
» Work with your adjuster and contractor to estimate the cost of repairs.
» Receive settlement checks and begin repairs.
Source: State Insurance Division |
Toyama said it’s too early for Zephyr to estimate the financial loss from its policyholders because the insurer is still receiving claims and has adjusters on the island assessing damage.
Hurricane insurance isn’t mandatory in Hawaii but most lenders require that homeowners purchase coverage, according to state Insurance Commissioner Gordon Ito.
The cost of hurricane insurance varies widely. Premiums for $250,000 of coverage range from $368 to $2,611, depending on whether the home is single-wall or double-wall, wood or masonry, with or without hurricane roof clips and foundation anchors.
The state offers a comparison chart for both homeowner’s insurance and hurricane insurance on its website at 1.usa.gov/1kHY7FH.
In addition, most policies have a 2 percent deductible for the value of the replacement cost, or $2,000, whichever is greater. In some cases, insurers offer a 5 percent deductible.
"Iselle was not a very large hurricane or tropical storm when it hit," Toyama said.
A good number of losses will likely fall within the deductible, he said, "but obviously the bigger the event or the storm, the greater the damage that will be caused. It all depends on the strength of the storm."
State Insurance Division spokeswoman Lindsay Chambers said it’s too early to tell how many claims will be filed because some parts of the island are still without electricity.
For each claim filed, the insurance company will assign an adjuster to assess damage and determine payment, she said.
The period it takes for a homeowner to be paid would depend on the extent of the damage and whether an adjuster can visit the site immediately to make an assessment, Chambers said.
Toyama said payments should be made to homeowners "in a timely fashion."
"I think a good portion of the claims are partial losses and it really shouldn’t take that long," he said.
