Lava zone 1 and 2 insurance

[Dan De Soto]

Just catching up on this discussion; here are few quick answers to questions I noticed:

You cannot insure land because the replacement value is based to heavily on market forces. Buildings on the other hand are based on what it would cost to rebuild and values are relatively stable, usually only adjusted for inflation.

Just to clarify Lloyds offers better coverage but is cheaper than HPIA only in some circumstances. Lloyds policies include hurricane so if you are not replacing a HPIA policy and a hurricane policy HPIA alone will probably be cheaper if your home is owner occupied. If you have a tenant occupied home Lloyds may be cheaper even with the additional hurricane coverage.

Lloyds policies did not get cheaper. HPIA had a 33% rate hike and then an additional 25% rate hike for tenant occupied homes in Lava zones 1 and two. HPIA polciies outside of lava zones had a rate decrease.

You can cancel a HPIA policy anytime and replace it with Lloyds. You will get a pro rata refund less 10% of unused premium. However, if you have a Zephyr hurricane policy Zephyr will not give any refund so it will probably be best to replace the coverage on the date of the Zephyr renewal. ICAT is another hurricane insurer. They give some refund but they can penalize up to 75% of unused premium if you cancel early and if you had coverage during hurricane season.

Lloyds does not insure homes under construction so stick with HPIA until you get your final inspection. You will need new coverage when construction is complete. Get a Lloyds quote at that time and you may be able have your new premium paid out of the refi closing.

Every situation is unique and this information is general. Ask your agent or send me an email or phone call for information specific to your situation. Also the industry changes constantly so this post may only be accurate for a few months. For example; if you have an HPIA policy in lava zone 1 (Leilani Estates) that is expiring in May you can switch it to Lloyds without the lava exclusion now. Normally Lloyds only offers policies in zone 1 with the lava exclusion. They just started offering this and are writing zone while they figure out their program. I would jump on this if I had a home in Leilani.

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

[Dan De Soto]

Here are some Lloyds and HPIA comparisons; Lloyds coverage in their Homeowner's package are all adjustable while HPIA is fixed. HPIA homeowners policies has other structures coverage fixed at 10% of the dwelling coverage, contents at 50% of the dwelling, loss of use at 20%, and the liability at $100,000.

With Lloyds you can have other structures, contents, loss of use and liability at almost any level or completley removed. When somone tells you how Lloyds saved them money over HPIA it may be that they removed all coverage except for dwelling coverage. This works for somone with a high risk tolerance but someone who has had a large claim before will probably want to pay for the additional coverage.

Also, Lloyds is generally on a better coverage form than HPIA. They cover the dwelling for every peril(fire, wind,explosions, etc) except the perils specifically listed on their exclusion list (war, earthquake, animal liablity, Etc).

HPIA only covers named perils. That is if you have a loss from a peril not listed on the covered perils list HPIA deso not have to pay. The only time I see HPIA better is that they do not have an animal exclusion. If you have a dog bite liability claim with a HPIA Homeowners policy they should pay up to $100,000. With lloyds you have a total excluision so would be on your own.



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

[EightFingers]

Dan,
Thanks for the additional infromation, but my original question/observation remains unanswered: Why won't HPIA insure houses on lots over 5 acres?

[Dan De Soto]

I can't comment on what another agent told you but we can write HPIA policies with lots over 5 acres.

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

[EightFingers]

Dan,
Mahalo for the clarification!