Requesting 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.
The resolution calls for homeowners insurers to initiate this loss-control program by January 1, 2025. It aims to incentivize policyholders to implement various fire risk mitigation strategies, including the removal of flammable materials and the use of non-flammable building materials. By granting premium discounts for these measures, insurers would lessen the financial burdens on homeowners who take proactive steps to safeguard their properties against fire, thereby also reducing claim payouts for insurers.
Senate Concurrent Resolution 24 (SCR24) proposes a significant change in the approach to homeowners insurance in Hawaii by requesting that insurers establish a loss-control program. This program aims to reduce risks of loss or damage due to fire, which has become increasingly pertinent given the devastating effects of the August 2023 Maui wildfires. The resolution highlights how many residents were uninsured during the crisis, largely due to prohibitively high premiums. The program, if adopted, would encourage homeowners to take preventive measures against fire risks and could potentially lead to lower insurance costs.
Support for SCR24 is based on the historical context of Hawaii having the highest homeowner's insurance markup rates and a lack of claims paid out by insurers. However, there could be contention around the program's implementation and regulation. Some stakeholders may worry that the loss-control measures required could impose additional burdens on homeowners, especially those who may not have the resources to afford renovations or modifications to their properties. Additionally, the success of the program depends on the effective adoption of rules by the Insurance Commissioner and ensuring that the standards are fair and accessible for all homeowners.