Why would one live in an area...

[Obie]

Hurricanes, Historically the BI has never ;taken a direct hit.

None in recent times but a few in the past including this un-named storm.

http://www.prh.noaa.gov/cphc/summaries/1958.php#TD

Here is the path of that storm.Looks like a direct hit on the Hamakua coast.

http://www.pdc.org/atlhi/html/atlhi-viewer.jsp

While this was not a major storm,the $500,000 in damage to the Big Island would translate to many millions today.

All in all I believe it's worth the risk to be able to live in such a beautiful place.