Council Resolution on LZ1 & LZ2 High Cost of Home Insurance

[Punatang]

My first post.  Please be gentle.

https://www.hawaiitribune-herald.com/202...s-1-and-2/

By MICHAEL BRESTOVANSKY Hawaii Tribune-Herald | Thursday, September 7, 2023, 12:05 a.m.

Hawaii County Council members are once again urging the state to take action against a looming insurance crisis that could leave hundreds of Puna residents unable to afford coverage.
When Florida insurer Universal Property and Casualty Insurance Co. announced in July that it will leave the Hawaii home and condo insurance market at the end of August 2024, hundreds of the provider’s Puna customers found themselves between a rock an a hard place.

---

Without UPC, the only other coverage available in Lava Zones 1 and 2 is through the state’s Hawaii Property Insurance Association, an insurance provider of last resort expressly established to underwrite coverage in high-risk areas that providers would otherwise be unwilling to enter.

But HPIA’s insurance premiums have ballooned since the 2018 Kilauea eruption, and many UPC customers have found that their rates would go up by 400% or more.
The County Council passed a resolution on Wednesday strongly urging immediate action by several state bodies 

[randomq]

If the state somehow mandates private coverage as part of doing business in Hawaii, it would drive up everyone's rates for the risks some Puna residents are choosing to take.

Personally, I knew the risks when I chose to live here.

---

(And welcome to Punaweb!)

[Punatang]

Kudos randomQ for assessing and accepting responsibility for your chosen level of risk.  Also, mahalo for your welcome.

A few things in the article jumped out at me. The first was the prediction of a wave of foreclosures in Puna  in a few months due to Universal customers inability to afford coverage under HPIA. The second is summarized below (which is a cut and paste from the Herald Tribune leilanidude):

Puna Councilwoman Ashley Kierkiewicz, who introduced the resolution, also suggested that the U.S. Geological Survey’s lava hazard maps for the island could be re-evaluated.
“They are from the 70s,” Kierkiewicz said, suggesting the USGS could take a closer look at the island’s volcano hazards. “But taking a closer look at the volcano risks on the island could be a sort of Pandora’s Box.”
Council Chair Heather Kimball agreed, speculating that, while some areas on the island thought to be hazardous might turn out to be safer than expected, other areas thought to be safe might also turn out not to be.

[MyManao]

A few things.. jumped out at me..

From the resolution itself..

BE IT FURTHER RESOLVED that the Hawaiʻi State Legislature, Department of Commerce Consumer Affairs, Insurance Division, and Hawaii Property Insurance Association (HPIA), explore various means of assisting affected residents, including: a) increasing HPIA policy premiums and expanding coverage to include commercial businesses, b) implementing subsidies or financial assistance programs to mitigate the financial burden for vulnerable residents in Lava Zones 1 and 2, and c) exploring the creation of a risk pooling mechanism.

Bold added by me for emphasis. Raise the premiums even more.. ain't that the clincher?

As to Ashley suggesting that the U.S. Geological Survey’s lava hazard map could be re-evaluated..

No they are not from the '70s. The current map was published in '92. But regardless, the notion that they would be different if re-evaluated is complete nonsense. In fact, if anything needs to be re-evaluated it is the government's policies, or lack thereof, regarding them. Sure re-evaluate, and then talk about land use policies that don't consider them. Talk about building codes that don't consider them. Talk about public funds used in areas where, based on those boundaries, any sane person would consider it a waste of money. Literally, let's talk about why we issue permits, or allow for any permanent development, in LZ1. Sure, open that can.. go ahead.. I dare them to!

Sheesh, let's talk about the advisability of development in places like Kona and Hilo, talk about the lack of egress in places like HOVE, and the real dangers involved..

[randomq]

@Punatang I must admit, I didn't read the article. :*)

I wasn't aware of the possibility of foreclosures due to lack of insurance. But perhaps mortgage companies could be incentivized not to foreclose for lack of lava insurance?

[leilanidude]

The first was the prediction of a wave of foreclosures in Puna in a few months due to Universal customers inability to afford coverage under HPIA
-----------------
Generally, when a property owner loses or cancels their property insurance, the lender will assign coverage through one of their subsidiary or affiliated companies and charge the borrower directly for that coverage. Despite this being a "lava zone 1/2" thing, I suspect that will happen. I am not saying that the property owner will like the price, just that it works that way on the mainland and almost all of the mortgage lenders are mainland based so that would be their first response.

[offgridguy]

Why not eliminate lava zones as they pertain to insurance and just say any lava related damage is not covered? Then people won't be so brave as to live in obvious danger zones.

[randomq]

They'd have to add a clause that fire is covered only when there is not lava or a fire caused by lava nearby, since that was a point of contention in 2018.

But yeah, you'd think eruptions/lava could be a separate rider. Maybe some state law or precedent standing in the way.

[Punatang]

The first was the prediction of a wave of foreclosures in Puna  in a few months due to Universal customers inability to afford coverage under HPIA
-----------------
Generally, when a property owner loses or cancels their property insurance, the lender will assign coverage through one of their subsidiary or affiliated companies and charge the borrower directly for that coverage. Despite this being a "lava zone 1/2" thing, I suspect that will happen. I am not saying that the property owner will like the price, just that it works that way on the mainland and almost all of the mortgage lenders are mainland based so that would be their first response.

So you think there are currently insurers, other than HPIA who will write policies in LZ1 and LZ2. I'm sure lot's of folks would be really interested to know who those subsidiaries and affiliates are.  You may have solved the whole problem.

[kalakoa]

I thought County wanted to "avoid the mistakes of the past" (their words) by creating a new subdivision away from high-risk lava zones and encouraging people to rebuild there? With paved roads, piped water, sewage treatment plant, etc. State land was identified as a possible site.

Is it really a better deal to create fake insurance and encourage people to build in LZ1?

Did nobody learn anything from the 2016 and 2018 flows?

Is this how the citizens of Hawaii County want to spend their time and money?

Demand better, people.