Lava is slowly flowing in the direction of Pahoa resident Sharon White’s home at Hawaiian Shores Recreational Estates.

The lava from Kilauea Volcano burned down a house Monday, heightening fears among homeowners such as White.

The 63-year-old retiree who moved to the Big Island from Portland, Ore., a year ago recently renewed her homeowner’s insurance policy with Universal Property & Casualty Insurance Co. after investing $26,000 for a rooftop solar system.

Her three-bedroom home is the dream residence she’s saved for her entire adult life, but now she is hoping the house will burn if the lava reaches her property.

"That’s the only way you’re going to get a claim paid. Isn’t that horrible?" White said, adding that her homeowner’s policy worth up to $257,550 only covers damage by fire, not lava. If the lava covers up her yard or damages her home without burning it down, her insurance would not pay her.

"I could be swallowed up by lava, but if it doesn’t come close enough to the structure to ignite, I’m just out of luck. It’s an awful situation to be in. I just had to remove myself emotionally."

Insurance is a top concern for homeowners in the path of the so-called June 27 lava flow. It is unclear how many homeowners will be covered by insurance if their homes are damaged or destroyed. It is hard to get coverage in the Puna district, and even if you have a policy, it typically comes with many caveats.

There are 4,958 parcels with buildings or structures in or around the Pahoa area threatened by lava. Of those, 2,412 are owner occupied, according to county records that do not include rental or vacation units or business and agricultural buildings.

For most insurance policies, fire is a covered peril as long as it meets the policy’s definitions, which vary between insurers, according to the state Insurance Division. In general, homeowners’ policies do not cover land or damaged water, electrical or sewer systems.

"A typical homeowner’s policy would cover fire it doesn’t cover lava itself but (it would cover) if the house burns down," said Matthew Cheung, senior underwriter at Dongbu Insurance Co. Ltd. "In any catastrophe it’s always a case-by-case, property-by-property (determination)."

"You could have a situation where a home is overrun with lava but doesn’t burn, but for the most part it’s going to burn," said Kim Hahn, Hawaii agency sales leader for State Farm Insurance Cos., which covers homes in the most dangerous lava zones in Pahoa but is no longer writing new business in the area. "We cover volcanic action and lava flow or (separately) fire loss in the majority of our policies. There’s different degrees of what is covered in a policy."

The state warns homeowners that each company’s plan is different, and it is important to review your policy.

"(Insurers) have no problem collecting your premiums, but when it comes time to pay out, that’s when they dispute everything," said Ted Stubbs, who’s been selling homes on the Big Island for 36 years. "You need to know every aspect of what’s in your policy."

Hawaii law prohibits insurers from canceling policies during their effective period except in cases of nonpayment. However, an insurer can choose not to renew a policy after it expires if it is considered too risky, the Insurance Division said.

"I’d bet that I don’t get it next year if this lava flow continues," White said, adding that her neighbors recently packed up their belongings and left for California. "I’m very nervous about what’s going to happen. I stopped spending any money on my home. It’s a beautiful home. I love my home, but I didn’t realize that it would be so easy for them (the insurance company)to do that (deny coverage). We are desperate for insurance. If I lose my house, I lose everything."

Most insurance companies have imposed a moratorium on new policies and increasing coverage on existing policies in lava zones closest to the flow, known as lava zones 1 and 2.

Special lava coverage may be available through what are known in the industry as "surplus line" carriers; however, the Insurance Division does not regulate these policies, and there is no guaranty fund to protect consumers if these unregulated insurers were to go bankrupt or shut down.

Pahoa resident Ilyn Narciso is currently unable to get homeowner’s insurance after letting her policy lapse a few years ago when her husband had a kidney transplant and she had medical bills to pay.

The 51-year-old, who lives with her husband, elderly parents and aunt and uncle, said her mother, a former papaya farmer, put all her savings into building the home in 1976.

"My insurance policy lapsed before all this happened, and I’ve been meaning to get one. I guess it’s one of those things where it’s a little too late kind of a thing," she said. "We’re not quite directly in the path of the flow, but it’s around us. The way it’s going right now, we’re going to be surrounded. I do have five family members that I take care of, so I’m also trying to look for lodging for them. I am concerned that we may lose everything."

White is already preparing for the worst, making calls to shipping carrier Matson Inc. to ensure she can get her personal belongings out in an emergency.

"I’ve had to get all my ducks in a row in preparation for an event that might happen," she said. "It’s an interesting scenario, not one I expected to be in a year into my Big Island adventure."

The Insurance Division is encouraging homeowners with questions or concerns about their coverage to call their insurers. The division can be reached at 586-2790 or 974-4000 (Big Island toll-free number).

State Farm agents are contacting homeowners who are in the direct path of the lava and, along with claims adjusters, have weekly calls with company executives to keep them abreast of the precarious situation, Hahn said.

"We contact people just to be proactive and to let them know they’re not in this on their own," she said. "The policyholders have been very grateful that we’re reaching out to them. If we know imminent danger or loss is going to occur, the policyholder has some responsibility to mitigate the loss as much as possible."

Homeowners urged to keep in touch with insurers

Tips for homeowners:

Question: What can I do if I do not have homeowner’s insurance?

Answer: Mitigate the amount of damage by removing all belongings from your home. Start making a plan for where you can stay and store your belongings until you find a permanent solution.

Q: Will my homeowner’s insurance policy cover damage from lava?

A: Each company’s policy is different, and homeowners should contact their insurer immediately to review their policy coverage. In general, if your home or structure is damaged as a result of the heat from a lava flow causing a fire, the damage may be covered under your policy as a fire peril.

Q: What can I do to prepare?

A: Keep your insurance policy in a safe place. If you need to evacuate, be sure to take it with you. Inventory belongings using pictures or the National Associations of Insurance Commissioners’ MyHome Scr.APP.book app. Proof of belongings and structures that were damaged before the lava flow reaches their property will help make the claims process easier.

Q: How long will it take to get paid?

A: This depends on the extent of the damage, and whether or not an adjuster can visit the site immediately to do an assessment and determine applicable coverage.

Q: If my house sustains damage or is burned down because of the lava flow, what should I do before and after I file a claim?

A: Once it is safe, check for damage. Secure your property to prevent further damage. Keep receipts of materials purchased to secure the property. Report your damage to your insurance company or agent. Submit proof of loss forms or other claim forms if requested by your insurance company.

Set aside and secure, if possible, damaged items for later review/inspection by your adjuster.

Do not 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. Begin repairs after receipt of settlement checks.

Do not access your property until an all clear has been given. If you are not able to assess the damage, let your insurer know and stay in touch with them until you are able to access the property with an adjuster.

Q: How does the claims process work?

Q: Once a claim is filed, the insurance company will assign a claims adjuster to assess the damage and determine applicable coverage. Homeowners are encouraged to maintain a written log of any conversations with their insurance agent and/or adjuster, noting dates and a summary of discussions.

If there are disagreements, review the policy and findings with the insurance company and negotiate a settlement. If an agreement is not reached, consumers may contact the Insurance Division at 974-4000.

Hawaii Insurance Division