Hawaii House Bill HB2054

Hawaii 2024 Regular Session

• Introduced: 1/22/24
• Refer: 1/24/24

Caption

Relating To Insurance.

Impact

The bill proposes to lower the insurance premium rates for homeowners by allowing the Hawaii Property Insurance Association to offer policies that separate volcano-related coverage from general homeowners' insurance. By excluding lava coverage, homeowners would have options that reduce overall premiums while still enabling protection from traditional risks associated with fire and other non-volcanic hazards. This change is expected to provide relief to residents in high-risk areas who have been burdened with exorbitantly priced insurance policies.

Summary

House Bill 2054 aims to address the significant insurance premiums faced by homeowners in lava zones in Hawaii. These areas are classified as high risk due to volcanic activity, resulting in higher costs for insurance policies that cover potential lava damage. The bill comes in response to the recent announcement by Universal Property and Casualty Insurance Co. that it would exit the Hawaii insurance market, leaving numerous policyholders without coverage, thus increasing reliance on the Hawaii Property Insurance Association, which is already facing challenges in underwriting insurance due to past losses and rising costs.

Contention

While the intention behind HB 2054 is to provide more affordable insurance options, there may be concerns regarding its implications on policyholders in lava zones. Opponents might argue that separating lava coverage from standard insurance may leave homeowners vulnerable to specific risks should volcanic activity occur. Additionally, issues could arise regarding the adequacy of coverage, as comprehensive insurance for residents may be compromised by opting for lower premiums that exclude lava damage. Thus, the debate may focus on finding the right balance between affordability and sufficient protection.