Homeowners across Hawaii are facing a troubling reality: soaring property insurance rates coupled with abrupt policy cancellations. In the aftermath of recent disasters, including wildfires and other natural calamities, residents like Kaneohe homeowner Carol Fahy are experiencing the financial repercussions firsthand.
Fahy recounts receiving an email notification from her insurance agent, citing adjustments in response to the evolving insurance landscape. Consequently, her existing policy was not renewed, prompting her to secure coverage from another provider at an additional cost of $500 annually. “It’s disheartening to see these figures continually rise,” Fahy expressed, mirroring the sentiments of many affected homeowners.
Reports indicate a widespread trend of escalating insurance premiums, with some individuals facing hikes amounting to tens of thousands of dollars annually. Notifications citing policy non-renewals due to changes in underwriting guidelines and heightened exposure to fire hazards have left homeowners scrambling to secure alternative coverage options.
The situation is particularly dire on Maui, where primary insurance carriers are withdrawing from the market altogether. Mahealani Strong, an independent insurance broker based in Lahaina, attributes the crisis to a confluence of factors. “For years, insurance companies amassed premiums without significant losses. However, the recent spate of disasters has depleted these reserves,” she explained.
Strong emphasizes the need for homeowners to reassess their insurance needs and adjust their budgets accordingly. She advises against relying solely on mortgage requirements for coverage estimates and advocates for engaging in meaningful discussions with insurance agents to ensure adequate protection.
In response to inquiries, the Hawaii Insurance Division acknowledged the challenges posed by a volatile insurance market characterized by surging rates and limited availability. The Division highlighted the impact of nationwide rate hikes influenced by contractions in the reinsurance market, which have resulted in significant cost increases for carriers.
Efforts are underway to address the looming crisis, including discussions to expand the Hawaii Property Insurance Association (HPIA) and reinstate the state-managed Hawaii Hurricane Relief Fund. However, Strong warns that relief may be years away, urging homeowners to brace for potential hardships in the interim.
As homeowners navigate this uncertain landscape, the Hawaii Insurance Division recommends exploring alternative insurers and consulting their annual premium comparison sheet and guide for guidance. With the specter of rising insurance rates looming, proactive measures are essential to safeguarding homes and livelihoods in the face of adversity.
