Lava zone 1 and 2 Insurance in Action

[Dan De Soto]

Correct, a lot of people are caught by that statment about the insurer being out of state. Insurers admitted in the state of Hawaii and licensed by the State are covered by the State Guaruntee fund. For this reason it is very important to consider the insurers financial rating whenever you buy a policy from an insurer not licesed in Hawaii. As a rule our agency is only allowed to use out of state insurers with a financial rating of A of a certain size. These insurers are very large. The rating company reviews the insurers financial status annualy and will either downgrade or upgrade the rating. For admitted insurers we can be less strict. AIG's bankrutcy created some doubt with consumers about the validity of financial ratings but I have not seen any out of state insurers that I have polciies with go bankrupt. Even in the case of AIG Hawaii they were quickly purchased by Farmers Insurance and consumers had no break in coverage.
As far as claims handling there are some consumer reports about insurers reputation for paying claims and overall consumer satisfaction. I don't endorse this publication but it was an intersting read: http://www.justice.org/docs/TenWorstInsu...panies.pdf
The Hawaii Insurance Commisioner's website used to have a customer satisfaction survey for most admitted Hawaii Insurers posted online but I don't see it anymore. You may be able to contact them for a copy.
When lava hit Kalapana the lava zones were not used in insurance underwriting so most all insures were offering policies in Kalapana. I don't know if anyone even had a HPIA policy at that time.
Generally on an HO3 policy there has to be specific exclusion listed in the policy for a claim to be denied. In your case I assure you that fire by lava is covered. If your home is surrounded by lava and does not burn that is another story. Usually the problems happen when a customer assumes something is covered. There is no substitute for reading a policy.

Dan De Soto
Mutual Underwriters
Insurance Agent
www.insurancehi.com
dan@mutualunderwriters.com
Tel: 808-961-3207
Fax: 808-969-1120
275 Ponahawai St., Ste#105
Hilo, HI 96720