Property insurance moratorium lifted for Puna district affected by lava flow

Property insurance moratorium lifted for Puna district affected by lava flow

PUNA, BIG ISLAND (HawaiiNewsNow) - Eight months after many insurers stopped providing coverage for homes in the Pahoa area due to the threat of the Puna lava flow, the moratorium on new policies has been lifted.

Hawaii County Mayor Billy Kenoi declared a state of emergency last October. Within weeks, the Hawai'i Property Insurance Association -- the very company set up by the state to provide insurance for homes in high-risk lava zones -- temporarily stopped issuing new insurance policies.

Insurance industry experts claimed moratoriums were routine before an impending disaster, like a hurricane, until the threat passes -- but the move stunned residents and troubled lawmakers.

"This lava threat was never going to be a Hurricane Iniki type of disaster where hundreds and thousands of homes were lost. It's a very limited type of effect and it was never appropriate for the insurance companies to pull out of a whole neighborhood in a time of crisis," said State Senator Russell Ruderman, who represents the Puna and Ka'u district.

Act 32, which was signed into law May 5th, requires the Hawai'i Property Insurance Association to lift the industry-imposed freeze on issuing residential property insurance within lava zones 1, 2 and 3 in Pahoa and lawmakers say it will prevent it from happening again.

"For the few homes that were actually in the path of the lava, I mean that's the reason why they had the property insurance to begin with. I understand insurance companies not renewing people who have not paid their insurance timely, but these were people who made sure their insurance was paid and was paying for their insurance years and years prior to the lava coming down," explained State Representative Joy San Buenaventura of the Puna district.

During the moratorium, officials say property values dropped drastically. Lawmakers say adding insult to injury -- many people who wanted to fix their homes after Hurricane Iselle were prevented from doing that because they could not get the homeowners' insurance to cover the refinance costs.

The Hawai'i County Mayor's Office released the following statement Wednesday: "The Puna community pulled together during the lava flow threat to protect one another, and this insurance is an important tool for families to protect their homes."

Only one house was claimed by the lava flow.

The state Insurance Division is now urging Pahoa area residents who could not get or renew homeowner's insurance during the Puna lava flow to re-apply for coverage.

"In any event or potential catastrophe homeowners should have their homes covered to protect themselves against financial loss if there's damage to their homes," said Hawai'i Insurance Commissioner Gordon Ito.

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