Living in Lava Zone 2

[leilanidude]

It is my understanding that any insurance payouts deduct from disaster payouts.

Generally true. In this case, they have already declared (a few months ago) that FEMA monies collected do not get deducted from the buyout.

[Obie]

Having received an insurance payment for the loss of a house and contents doesn't preclude you from receiving a buyout. Insurance didn't reimburse for the loss of the land. In some cases the land value is considerable.

The buyouts will go to those that had no insurance 1st. They will work down a list and if enough money exists some could receive a buyout even if they got compensated by insurance.

At the top of the list is residents of Hawaii who were Homeowners.

Many of the destroyed properties were vacation rentals and owned by people out of state, these may not receive anything.

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Hud Rules on duplication of benefits

Buyout offers are based on the pre-disaster (2017) appraised total market value of the property minus duplication of benefits and are subject to this maximum buyout amount.

Following release of the draft Initial Community Development Block Grant Disaster-Recovery (CDBG-DR) Action Plan, the recovery team worked with the U.S. Department of Housing and Urban Development (HUD) to clarify the application of duplication of benefits for the proposed voluntary housing buyout program. HUD has confirmed the following will not count as duplicative, meaning receiving these forms of assistance won’t reduce buyout grant amounts:

Federal Emergency Management Agency Individual Assistance for rental assistance, home repairs, or housing replacement;
U.S. Small Business Administration loans for home repairs, housing reconstruction, housing relocation, or other approved purposes;
Private insurance payouts for loss of structure and/or contents;
Private sources such as grants for home repairs or in-kind assistance.

[terracore]

I can't speak towards this particular issue, but generally speaking, having private insurance doesn't preclude somebody from collecting other benefits like a buy out. The reasoning behind the concept goes back hundreds of years, but it is based on the idea that insurance is a type of "pre-payment" towards a financial loss, not an entitlement. For example, property owner "A" has paid $1000/year homeowners insurance for 40 years and their house is taken out by lava. Property owner "B" has never had insurance. Are they going to reimburse property owner "A" extra for paying $40k insurance premiums over the years to make them "whole" compared to "B"? Similarly, if you get into an accident and the insurance company gives you $10k, the money is not treated as income and is not subject to taxation. The same usually applies to a $1 million life insurance policy. During the "cash for clunkers" program they could accept any vehicle that was driven in (subject to other rules) even if the owner had been paid an insurance claim on it.

Private insurance is a separate financial contract between two consenting parties, the government doesn't know the terms of each individual contract, the premiums paid over the years, the payout amounts, etc, nor should they necessarily discriminate on a person based on whatever business relationships they made to protect themselves. Because once they go down that path, how far do they go? If somebody died because of the lava on their land and the family gets a life insurance payout, does THAT mean they don't get a reimbursement? No. Whether or not the person had insurance or not is really none of the government's business. If they are going to buy out properties they need to do it on the basis of what the person was being taxed at, and not take into factors of whether they were paying premiums to protect their financial interests or not.

The government doesn't care if you can't pay your taxes because your insurance premiums are too high. They will take your property. Likewise if they are buying out properties, they shouldn't look at whether or not you had insurance on it.

Look at it the other way. If your property was taxed at $200k and that is what they pay you, what if it's worth $500k after the eruption (far fetched, but let's say now it's on a new black sand beach), they aren't going to offer you an additional $300k. You either take the deal (and the loss) or not. If you had insurance, maybe you break out even. They don't, and shouldn't care.

Deal, or no deal.

[kalakoa]

Buyouts don't solve the original problem: people still have development rights in an active rift zone.

Nor is there any requirement that people remain here after accepting a buyout. Whether the reduced liabilities create an economic stimulus is another question.

[Obie]

I have a friend who had insurance. It was provided by the lender and only covered their interest in the house.
He was left owing the lender for closing costs that he had wrapped into the loan so he had to continue making payments on a house that no longer existed.
He wanted to keep his credit rating.
He may get a buyout.

[AaronM]

What will the county do with the land that they acquire through the buyout program.

[Obie]

Leave it unbuildable and abandon it.
I have 3 lots that I won't be compensated for so I will own those forever.
It will take 30 years for it to get overgrown. Most of us are worried about squatters and trash dumping.

[Kimo1967]

I am in LZ1 and have conventional insurance - got the policy in December, switching from HPIA.

leilanidude do you have any tips on who is offering policies?  I'm looking for Z2.  Mahalo

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I'm in LZ 2 and I have conventional insurance.

Rob any tips on LZ2 insurers would be very helpful and greatly appreciated.

[AaronM]

As soon as the flow field cools down, I predict a Kalapana Gardens style revitalization. Homes amid the newly purchased vacant County lots in a checkerboard pattern. Should be interesting.