Community efforts to stabilize the home insurance market in lower Puna have stalled, even as Gov. Josh Green takes emergency actions to address skyrocketing condominium insurance rates.
Green earlier this month signed an emergency proclamation addressing condo insurance rate increases in the wake of the deadly 2023 Maui wildfires. Although the market was already unsteady before the disaster, the wildfires led to enormous rate hikes, some as high as 1,000%.
The proclamation stated that only three insurers in the state are offering policies to condominium associations that provide coverage for condo common areas, and those policies often cover only 20% to 30% of a building’s hurricane exposure. Associations are therefore forced to buy coverage from non-standard providers, at higher rates not regulated by the state.
Through the emergency proclamation, Green announced that funds would be taken from the Hawaii Hurricane Relief Fund and loaned to the Hawaii Property Insurance Association, through which condo owners and associations could purchase hurricane and property insurance.
That solution was the brainchild of a joint task force established by the governor earlier this year “to evaluate and make recommendations on the extreme challenges and complex issues surrounding property insurance, particularly affecting condominiums, but with awareness of impacts to other housing,” according to a news release from Green’s office.
But that task force has not addressed insurance issues in at least one community: Hawaii Island’s Lava Zones 1 and 2, where retreating insurance providers have left homeowners with no coverage options save for HPIA’s insurance of last resort, which has premiums many times higher than what owners were paying before. In some cases, those premiums also represent a rate hike of up to 1,000%.
“I don’t know if the task force ever looked at Puna or Lava Zones 1 and 2,” said Puna resident Andrea Rosanoff. “I was glad there was a task force, but I didn’t know the task force was going to only focus on the condo issue.”
State Rep. Greggor Ilagan of Puna said that, all things considered, the insurance market for condo owners statewide is even more dire than for lower Puna residents: At least Puna residents can still get coverage through HPIA, expensive though it is. Condo owners previously didn’t even have that luxury, he said.
But even with the proclamation opening HPIA to them, condo owners and associations will still have to deal with high rates through the HPIA, the same as lower Puna residents, Ilagan said.
“I knew that, once (the proclamation) happens, everyone will wonder what’s going on with Lava Zones 1 and 2,” Ilagan said. “And I’ve been saying, once there’s any subsidies on the table, then I’ll be the first to go after them.”
Ilagan had introduced a raft of bills during the previous legislative session to alleviate the Puna insurance crisis, some of which involved state insurance subsidies. All those bills were shot down, but Ilagan said he’d try again next session.
“Next year is going to be the year of insurance,” Ilagan predicted.
Meanwhile, Rosanoff and other community members have been pursuing their own solutions, to little avail. Rosanoff said she has polled residents about their interest in forming a not-for-profit insurance cooperative, but the results were not promising.
“There should be about 6,000 homes in the area that are affected by this,” said resident Steven Gran. “But we only got about 150 responses.”
Between the muted response and other problems — Gran said the state Department of Commerce and Consumer Affairs wouldn’t allow them to start an organization with the word “insurance” in its name — the cooperative concept seems to be dead in the water for the time being.
“I’d hope we’d be able to piggyback off of the proclamation, but the more time goes on, the more people lose interest,” Gran said. “It feels like we’ve exhausted all our resources.”
But Rosanoff added that, regardless of the outcome of the proclamation, the problem is not going away.
States all across the country are facing their own similar insurance crises, and with climate change-driven disasters expected to increase, she said now is the time to get creative about insurance.
While Rosanoff was understanding about the dire straits condo owners and Maui residents are in after the Lahaina fires, she said she hopes the state will keep all communities in mind when addressing insurance.
“I’m not anti-Maui or anything,” Rosanoff. “We just want to be at the table and be part of the conversation. And, hopefully, part of the solution.”
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
