Hawaii 2024 Regular Session

Hawaii Senate Bill SB2242 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	THE SENATE S.B. NO. 2242 THIRTY-SECOND LEGISLATURE, 2024 STATE OF HAWAII A BILL FOR AN ACT Relating to Insurance. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
2	2
3	3	THE SENATE S.B. NO. 2242
4	4	THIRTY-SECOND LEGISLATURE, 2024
5	5	STATE OF HAWAII
6	6
7	7	THE SENATE
8	8
9	9	S.B. NO.
10	10
11	11	2242
12	12
13	13	THIRTY-SECOND LEGISLATURE, 2024
14	14
15	15
16	16
17	17	STATE OF HAWAII
18	18
19	19
20	20
21	21
22	22
23	23
24	24
25	25
26	26
27	27
28	28
29	29
30	30
31	31	A BILL FOR AN ACT
32	32
33	33
34	34
35	35
36	36
37	37	Relating to Insurance.
38	38
39	39
40	40
41	41
42	42
43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
44	44
45	45
46	46
47	47	SECTION 1. The legislature finds that the August 2023 wildfire on the island of Maui devastated the historic town of Lahaina. However, one wooden house in the center of Lahaina, now known as the "Miracle House", survived the wildfire relatively unscathed due to certain loss-control measures the owner implemented. The "Miracle House" recently underwent a renovation, which specifically included removing the landscaping directly surrounding the house and replacing it with river stones, which experts determined made the biggest difference in protecting the house from the wildfire. Wildfire experts also maintain that the "zone zero" or "ember ignition zone" is a key factor in identifying whether homes are more susceptible to fire damage. For example, removing combustible materials, like wood fences, bushes, and dry grass, within a five-foot radius directly surrounding the house can reduce certain fire risks. The legislature also finds that many Lahaina residents did not have homeowner's insurance. The legislature believes that the high cost of homeowner's insurance premiums in the State may be one factor that deters homeowners from obtaining coverage. A recent analysis revealed that Hawaii has been historically lucrative for insurers as they have been raising premium rates without having to pay out many claims. As a result, the State had the highest homeowner's insurance markup rates of any state from 1996 to 2021. The legislature also finds that many insurers have loss-control programs that are designed to help policyholders reduce risks of damage and loss from certain perils. These programs benefit both the policyholder, who is rewarded with reductions to their insurance premium rates, and the insurer, who is less likely to have to pay out on claims. Accordingly, the purpose of this measure is to require homeowners insurers to establish a loss-control program aimed at reducing the risk of loss or mitigating damage to insured property caused by the peril of fire, including fire caused by wildfires, lava, or both, with discounted premium rates for policyholders who implement certain loss-control measures. SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10E to be appropriately designated and to read as follows: "§431:10E- Homeowners insurance; loss-control program; premium reduction for fire safety. (a) Beginning January 1, 2025, and in accordance with rules adopted by the commissioner, a homeowners insurer shall grant to an applicant a discount in the applicant's homeowners insurance premiums for insured property upon receipt of written verification from the applicant that, at the insured property, the applicant has implemented loss-control measures to lessen or minimize an insured loss from the perils of fire, including fire caused by wildfire, lava, or both, including: (1) Removal of flammable material, debris, and vegetation within certain perimeters of the insured property; (2) Removal of risk of fire caused by lava; and (3) Use of inflammable material in the construction or renovation of the insured property. (b) The commissioner shall prescribe the requirements for determining that insured property was constructed or renovated with inflammable material. (c) Verification under this section shall comply with the requirements prescribed by the commissioner. (d) For purposes of this section, "homeowners insurance" and "homeowners insurer" have the same meanings as defined in section 431:14-110.8(c)." SECTION 3. New statutory material is underscored. SECTION 4. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________
48	48
49	49	SECTION 1. The legislature finds that the August 2023 wildfire on the island of Maui devastated the historic town of Lahaina. However, one wooden house in the center of Lahaina, now known as the "Miracle House", survived the wildfire relatively unscathed due to certain loss-control measures the owner implemented.
50	50
51	51	The "Miracle House" recently underwent a renovation, which specifically included removing the landscaping directly surrounding the house and replacing it with river stones, which experts determined made the biggest difference in protecting the house from the wildfire. Wildfire experts also maintain that the "zone zero" or "ember ignition zone" is a key factor in identifying whether homes are more susceptible to fire damage. For example, removing combustible materials, like wood fences, bushes, and dry grass, within a five-foot radius directly surrounding the house can reduce certain fire risks.
52	52
53	53	The legislature also finds that many Lahaina residents did not have homeowner's insurance. The legislature believes that the high cost of homeowner's insurance premiums in the State may be one factor that deters homeowners from obtaining coverage. A recent analysis revealed that Hawaii has been historically lucrative for insurers as they have been raising premium rates without having to pay out many claims. As a result, the State had the highest homeowner's insurance markup rates of any state from 1996 to 2021.
54	54
55	55	The legislature also finds that many insurers have loss-control programs that are designed to help policyholders reduce risks of damage and loss from certain perils. These programs benefit both the policyholder, who is rewarded with reductions to their insurance premium rates, and the insurer, who is less likely to have to pay out on claims.
56	56
57	57	Accordingly, the purpose of this measure is to require homeowners insurers to establish a loss-control program aimed at reducing the risk of loss or mitigating damage to insured property caused by the peril of fire, including fire caused by wildfires, lava, or both, with discounted premium rates for policyholders who implement certain loss-control measures.
58	58
59	59	SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10E to be appropriately designated and to read as follows:
60	60
61	61	"§431:10E- Homeowners insurance; loss-control program; premium reduction for fire safety. (a) Beginning January 1, 2025, and in accordance with rules adopted by the commissioner, a homeowners insurer shall grant to an applicant a discount in the applicant's homeowners insurance premiums for insured property upon receipt of written verification from the applicant that, at the insured property, the applicant has implemented loss-control measures to lessen or minimize an insured loss from the perils of fire, including fire caused by wildfire, lava, or both, including:
62	62
63	63	(1) Removal of flammable material, debris, and vegetation within certain perimeters of the insured property;
64	64
65	65	(2) Removal of risk of fire caused by lava; and
66	66
67	67	(3) Use of inflammable material in the construction or renovation of the insured property.
68	68
69	69	(b) The commissioner shall prescribe the requirements for determining that insured property was constructed or renovated with inflammable material.
70	70
71	71	(c) Verification under this section shall comply with the requirements prescribed by the commissioner.
72	72
73	73	(d) For purposes of this section, "homeowners insurance" and "homeowners insurer" have the same meanings as defined in section 431:14-110.8(c)."
74	74
75	75	SECTION 3. New statutory material is underscored.
76	76
77	77	SECTION 4. This Act shall take effect upon its approval.
78	78
79	79
80	80
81	81	INTRODUCED BY: _____________________________
82	82
83	83	INTRODUCED BY:
84	84
85	85	_____________________________
86	86
87	87
88	88
89	89
90	90
91	91	Report Title: Insurance Commissioner; Homeowners Insurance; Loss-Control Program; Discounted Premium Rates; Fire; Wildfire; Lava; Rulemaking Description: Beginning 1/1/2025, requires homeowners insurers to establish a loss-control program aimed at reducing the risk of the loss or mitigating damage to the insured property caused by the peril of fire, including fire caused by wildfire, lava, or both, with discounted premium rates for policyholders who implement certain loss-control measures. Requires the Insurance Commissioner to adopt rules. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
92	92
93	93
94	94
95	95
96	96
97	97
98	98
99	99	Report Title:
100	100
101	101	Insurance Commissioner; Homeowners Insurance; Loss-Control Program; Discounted Premium Rates; Fire; Wildfire; Lava; Rulemaking
102	102
103	103
104	104
105	105	Description:
106	106
107	107	Beginning 1/1/2025, requires homeowners insurers to establish a loss-control program aimed at reducing the risk of the loss or mitigating damage to the insured property caused by the peril of fire, including fire caused by wildfire, lava, or both, with discounted premium rates for policyholders who implement certain loss-control measures. Requires the Insurance Commissioner to adopt rules.
108	108
109	109
110	110
111	111
112	112
113	113
114	114
115	115	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.