Insurance for Homes Near Hawaii Volcano Costly, If It’s Available

Living in Hawaii on the slope of one of the most active volcanos in the world can be expensive when it comes to homeowners insurance.

Wendy Ford is losing her policy this month because her insurer, Liberty Mutual Fire Insurance Co., no longer covers property located in Lava Zone 1, an area of the Big Island with the highest risk of inundation from Kilauea. The volcano has been erupting since Jan. 3, 1983.

Ford could turn to the Hawaii Property Insurance Association, a state-sponsored program created in 1992 for homes in high-risk lava zones, but it will cost her nearly four times as much to insure her home.

“To be perfectly honest, with all this going on, I’m actually thinking of selling,” Ford said.

Norrin Lau, a broker with Finance Insurance Ltd., said only two companies, HPIA and Lloyd’s of London, write new policies for the area, but Lloyd’s doesn’t insure against fire, the biggest threat posed by lava.

That leaves HPIA, “an insurer of last resort,” state Insurance Commissioner J.P. Schmidt said.

“So, it is considered a safety net where if you can’t find insurance anywhere else, you can get it from HPIA,” Schmidt said.

The program is funded by premiums customers pay and subsidies from private insurers operating in Hawaii. Started in 1992, HPIA was insuring 2,664 homes in Lava Zones 1 and 2 as of late last year.

Lava zones are numbered one through nine. The lower the number, the more chance of lava activity.

State Farm Insurance stopped writing homeowners policies in the two highest risk zones in 2000 but continues to renew policies held by customers in good standing, company spokeswoman Carolyn Fujioka said.

“I think as more data became available about the risks involved, it developed to where State Farm did not want to take on further risk in the area,” she said.

State Farm continues issuing policies for Lava Zone 3 and higher, Fujioka said.

Latest Comments

• November 15, 2011 at 2:03 pm

  W Ford says:

  Not only was I quoted out of context, but the information in the article is not at all valid. My property IS NOT at the "base" of a volcano and there are, in fact, many subdiv... read more
• June 4, 2011 at 5:31 am

  Philip Maise says:

  Hawaii Revised Statutes require all insurance firms to provide a standard form fire policy and prohibit them from excluding perils not covered by a New York policy set down in... read more
• June 4, 2011 at 5:26 am

  Philip Maise says:

  The information presented in this article is not correct. By law all residents of Hawaii with qualified homes can get insurance in all areas. Additionally, no insurance firm m... read more