The state Insurance Division is urging Hawaii island residents who could not get homeowner’s insurance due to the threat of the Puna lava flow to seek insurance coverage now.
Act 32, signed into law May 5, required the Hawaii Property Insurance Association to lift the industry-imposed moratorium on the issuance of residential property insurance within higher-risk lava zones 1, 2 and 3 in Pahoa.
"This is an opportunity to safeguard against unexpected property damage," Hawaii Insurance Commissioner Gordon Ito said.
In September, after the Hawaii County mayor declared a state of emergency, many insurers stopped new coverage for homes.
"As the lava flow approached Pahoa, they stopped writing new policies," Ito said.
Homeowner’s insurance from insurance carriers was not available, and the HPIA put a moratorium on new policies.
The Insurance Division contacted insurance companies and urged them to renew existing policyholders.
"For the most part, they were good corporate citizens and retained their customers," Ito said.
The HPIA also continued to renew policies for existing customers with homeowner’s insurance.
Ito suggests homeowners contact their insurance agents and shop for a policy if they don’t have one. The HPIA is an option but cheaper policies may be available.
However, other insurance companies are not legally required to provide insurance coverage to homeowners in those lava zones.
The HPIA was created in 1991 in response to the unavailability of insurance during the lava flow that destroyed homes in Kalapana.
Although all insurers registered in the state are members of the HPIA, the association itself acts as an insurer of last resort under the state’s insurance code.
Under Act 32, should another lava flow threaten homes, the HPIA could potentially place another moratorium on the issuance of new policies, and homeowners would be subject to a six-month waiting period.
For more information go to cca.hawaii.gov/ins or call the Insurance Division at 586-2790.
