Homeowners who lost everything in the Kilauea eruption will be covered by insurance after all

A legal battle left many families in limbo.

Homeowners who lost everything in the Kilauea eruption will be covered by insurance after all
The Haysmer's home was among the many lost in the eruption. (Hawaii News Now/file)

HONOLULU (HawaiiNewsNow) - Families who lost their home in the Kilauea eruption were angered to learn their insurance company wouldn’t cover the damages brought on by the lava.

A legal battle ensued and several months later, the insurance company appears to have changed its stance.

Lunel and Philip Haysmer paid $2,700 a year in premiums to Lloyds of London. When their home burned in early May at the height of the Kilauea eruption, they filed a claim with the insurance company.

In July, the company denied the claim saying that the fine print in the Haysmer’s policy specifically excluded all “direct or indirect” damages from lava.

The couple filed a lawsuit suing the company for failing to honor damage claims.

But a day before Thanksgiving, the couple learned Lloyds of London altered their decision to deny the the claims of the Haysmers, and other homeowners in similar situations.

“It couldn’t have been any better happening the day before Thanksgiving. It actually put us both into tears for a while. It has been such a stressful period not knowing whether you’d go the rest of your life on a very meager income or if we would have that money to rely on at some point,” Philip Haysmer said.

Lloyds of London abruptly reversed all denials of claims for the Kilauea volcano victims, agreeing to pay pay policy limits plus 10% interest to policyholders.

Attorney Jeffrey Foster who represented the Haysmers estimates the payout will be in the tens of millions of dollars for various homeowners.

“Lloyds of London made the right decision in deciding to get these claims resolved instead of continuing to fight the exclusion under the claim,” Foster said.

He wouldn’t disclose a specific amount homeowners would be getting paid, but he said, “We are going to work through these one by one. I want to make sure that everyone is paid not only what they deserve, but also the amount that is going to provide a disincentive for Lloyd’s or anyone else to do this again.”

The payout is for dozens of homeowners whose homes were completely destroyed. Dozens of other homeowners, whose property sustained partial damage, are still dealing with unsettled claims.

The announcement is a major win for families like the Haysmers, whose lives have been forever changed by the power of Kilauea.

“We are really kind of in shock. It’s extremely good news. There’s no doubt about that," Lunel Haysmer said. "Having lived in a limbo land for seven months, when from our perspective this should have been handled within the first couple of months, it’s hard to take in.”

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