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.