Requesting The Insurance Commissioner To Conduct A Comprehensive Study On Wildfire Risk And Insurance, Including Market-based Approaches.
The resolution emphasizes the urgent need for improved insurance strategies and recommendations to mitigate the impact of wildfires on property owners and businesses in Hawaii. It acknowledges that the recent devastating wildfires have fundamentally altered the perception of wildfire risks by insurers, which could lead to increased premiums, reduced policy availability, or even withdrawal from the insurance market entirely. This trend raises concerns about adequate coverage for residents, particularly those vulnerable to extreme weather events attributed to climate change.
SCR186 requests the Insurance Commissioner to conduct a comprehensive study on wildfire risk and insurance in the wake of the devastating August 2023 wildfires in Hawaii. These wildfires resulted in extensive destruction, particularly in Lahaina, where over 2,000 homes and businesses were destroyed, leading to significant economic losses that are being estimated at $2.7 million per day. The bill recognizes the growing threat of wildfires, exacerbated by climate change, and aims to ensure that residents have adequate insurance coverage for future wildfire risks.
One notable aspect of SCR186 is its focus on addressing the challenges faced by Lahaina residents post-wildfire, including delayed insurance claims and ongoing housing uncertainties. The bill is positioned as a response to these pressing issues, which are expected to persist for years as the rebuilding of Lahaina could take between five to ten years. There may be contention regarding the nature and effectiveness of the proposed market-based approaches to insurance, as stakeholders in the insurance industry and affected communities might have differing opinions on the best path forward to ensure access to adequate insurance coverage.