Tag Archives: Hawaii

Hawaii’s Big Island Volcanic Eruption – What You Need to Know

By Michael Barry, Head of Media and Public Affairs, Insurance Information Institute

 

The number of structures destroyed by the eruption of the Kilauea volcano on Hawaii’s Big Island has climbed up to 35 today since the eruption first started on Thursday, May 3, sending sulfur dioxide into the air, and prompting the evacuation of at least 1,700 residents.

The issues impacting Hawaii’s Big Island:

  • The percentage of impacted property owners carrying either homeowners, business, or earthquake insurance is unknown at this time.
  • Moreover, no one knows how long the eruption will continue; in 1955, the Kilauea volcano erupted for about three months.
  • Lava Zones 1 and 2—deemed the most dangerous of the nine Lava Zones on the Big Island—are where the current crisis is occurring.
  • The U.S. Geological Survey (USGS) makes the Lava Zone designations and the federal governmental agency’s Zone ratings are considered when insurers assess their risks on Hawaii’s Big Island.
  • The Big Island was also the site of a 6.9-magnitude earthquake on Friday, May 4, the strongest quake to hit Hawaii in 40-plus years.  The earthquake was one of hundreds to be felt recently on the Big Island even though none of them caused any notable threat either to life or property.

 The insurance coverages which will come into play:

  • Lava-caused property damage is usually attributed to fire; fire-caused losses are covered under standard homeowners (h/o) and business insurance property policies.
  • Earthquake-caused property damage, or losses tied either to earth movement or land tremors, is covered only if the homeowner or business owner purchased an earthquake insurance policy in addition to a standard h/o or business insurance policy.
  • Few property owners in this part of the Big Island have earthquake insurance coverage.
  • Homeowners forced to evacuate their residences might have coverage through their h/o policy for additional living expenses (ALE) but ALE usually only kicks in when a home has been directly impacted by lava flow.
  • Lava and earthquake-caused (fire, falling objects) property damage to vehicles is generally covered under standard auto insurance policies so as long as the vehicle owner purchased optional comprehensive coverage.
  • More than 3 out of 4 drivers (78 percent) nationwide had comprehensive coverage on their vehicle as of 2015.

The insurers who cover these risks:

  • The top 10 writers of homeowners insurance in Hawaii appear below. (more here)
  • The Hawaii Property Insurance Association, the state’s not-for-profit property insurer of last resort, has since the 1990s sold property insurance to homeowners unable to purchase coverage due to the threat of an volcanic eruption in Lava Zones 1 and 2 on Hawaii’s Big Island.

The state government’s response to the crisis:

  • Governor David Ige (pronounced E-GAY) visited the Big Island on Friday, May 4, and met w/elected officials, first responders, and impacted residents.
  • The governor activated Hawaii’s National Guard to assist Hawaii County with monitoring sulfur dioxide gas emissions, facilitating evacuations, and providing neighborhood security.
  • Hawaii’s insurance regulator has posted a Lava Flow Insurance Information document aimed at consumers.

 

Thanks to Alison Ueoka, president, Hawaii Insurers Council (HIC) and Michael Onofrietti, senior VP, Island Insurance, and the HIC’s board president, for their help in developing this post.

The Kilauea volcano eruption – a primer on insurance coverage

Over two dozen homes have been destroyed so far when the Kilauea volcano on the island of Hawaii began erupting last week. Lava flowed into residential neighborhoods on the eastern side, as this Wall Street Journal video shows, and the island  has been shaken by hundreds of earthquakes, the largest one with a magnitude of 6.9 occurred on Friday.

The I.I.I. has a primer on volcanic eruption insurance coverage. Below are some highlights:

What’s covered

  • Most home, renters and business insurance policies provide coverage for property loss caused by volcanic eruption when it is the result of a volcanic blast, airborne shockwaves, ash, dust or lava flow. Fire or explosion resulting from volcanic eruption also is covered.
  • Homeowners and business owners’ policies also provide coverage for property damage, vandalism or theft due to looting if the occupants are displaced.
  • There is typically a 72-hour waiting period before business interruption coverage kicks in.
  • Damage to vehicles caused by lava flow is covered under your auto insurance policy if you have comprehensive coverage, which is optional. Direct, sudden damage to engines from volcanic ash or dust is also covered under most policies.

What isn’t covered

  • Most home, renters and business insurance policies do not cover damage from earthquake, land tremors, landslide, mudflow or other earth movement regardless of whether the quake is caused by or causes a volcanic eruption. Earthquake insurance is available from private insurers as an endorsement to a homeowners policy.
  • Damage to land, trees, shrubs, lawns, property in the open or open sheds (or the contents of those sheds) is typically not covered.
  • The cost to remove ash from personal property is generally not covered unless the ash first causes direct physical loss to personal property. There is also no coverage to remove ash from the surrounding land.
  • Damage that occurs to homes, businesses or vehicles over time due to volcanic dust is not covered under most policies.
  • Volcanic Effusion (i.e. volcanic water and mud) is not covered under a typical homeowners, renters or business insurance policy. However, it is covered by flood insurance, available through the National Flood Insurance Program.

 

 

Hawaii, Florida, Georgia and North Carolina Prepare for Storms

With numerous tropical systems in the Atlantic and two major hurricanes (Madeline and Lester) threatening Hawaii in the Pacific, insurers are keeping a close watch to see how things develop.

Over at Wunderblog, Dr. Jeff Masters observes that the dual scenario of two major hurricanes heading towards Hawaii is unprecedented in hurricane record keeping.

Hurricane Madeline, the closer of the two to Hawaii, intensified rapidly, growing from tropical storm to Category 3 strength in just 24 hours, Dr. Masters notes, and has since intensified to Category 4.

While the forecast models are not conclusive on the exact tracks and intensity of these named storms, it’s clear that both Hurricane Madeline and Hurricane Lester could affect Hawaii with high surf, torrential rain, and potential winds over the next week.

Hawaii’s costliest hurricane, based on insured property losses, was Hurricane Iniki in September 1992. Iniki caused $1.6 billion in damage when it occurred, or $2.7 billion in 2014 dollars, according to the Insurance Information Institute (I.I.I.).

Check out the I.I.I.’s Hawaii Hurricane Insurance Fact File for more information, including the top writers of homeowners, commercial and auto insurance.

Meanwhile, on the U.S. Atlantic coast, a tropical storm warning is in effect for the coast of North Carolina from Cape Lookout to Oregon Inlet for tropical depression eight.

A second system—tropical depression nine— is also being closely watched in the Gulf of Mexico. In its latest public advisory, the National Hurricane Center says the system is set to strengthen and that interests in central and northern Florida, and southeastern Georgia should monitor its progress.

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I.I.I.’s Florida insurance representative Lynne McChristian offers some sound advice on making sure your property insurance is ready for named storms in her latest blog post.

Take a look at I.I.I.’s North Carolina Hurricane Insurance Fact File, Georgia Hurricane Insurance Fact File, and Florida Hurricane Fact File for more information.