Relating To The Hawaii Property Insurance Association.
The proposed modernization of HIPIA is expected to address significant shortcomings in existing software, allowing for improved service delivery through better efficiency and additional online functionalities such as payment plans. By upgrading its systems, HIPIA could expand its coverage options, catering to an increased demand for property insurance policies, especially amid rising risks such as climate change that affect properties outside of traditional lava zones. However, this could also lead to higher fees and premiums as the association works to fund the technological upgrades.
House Bill 2050 aims to modernize and expand the capabilities of the Hawaii Property Insurance Association (HIPIA), which was established to provide basic property insurance to residents unable to secure homeowners insurance in the private market, particularly due to concerns about volcanic activity in lava zones 1 and 2 on the island of Hawaii. The bill proposes to appropriate funds to the HIPIA to revamp aged technology systems that currently impede the association's capacity to adapt to the evolving insurance market. As many residents are facing limited options due to the exit of major players like Universal Property and Casualty Insurance Company, the need for modernization is increasingly urgent.
While the modernization of the HIPIA is generally viewed as necessary, there are concerns regarding the potential financial implications for homeowners. Critics worry that the increased fees necessary for revamping the insured systems could exacerbate an already delicate insurance market for those in high-risk areas. Additionally, the appropriation might exceed the state’s general fund expenditure ceiling for fiscal year 2024-2025, raising questions about fiscal responsibility and prioritization of state resources.