The Hawaii legislature passed a bill in its recently concluded session to protect homeowners and businesses affected by lava flows from losing coverage.
The Puna district on the Big Island was severely impacted by the Pu`u O`o lava flow as it crept closer to homes, businesses, schools and populated areas. Problems were created by the imposition of a moratorium on the sale of new policies in certain areas of the Puna district.
SB 589 [here] grants relief to homeowners who have had continuous insurance in lava zone areas that are declared to be in a state of emergency. The bill (1) allows the homeowners to have their policies renewed, (2) permits continued coverage for homeowners who wish to sell their homes, (3) grants coverage for new buyers of an insured property, and (4) allows homeowners who have not previously had insurance to purchase coverage from the Hawaii Property Insurance Association.
Section 2 of SB 589 restricts the number of policies that may be non-renewed in a lava zone declared to be in a state of emergency to no more than five percent of the total number of covered policies issued by an insurer in that lava zone.
Section 3 of SB 589 provides that where a state of emergency is declared in a lava zone and residential property insurance is unavailable due to a moratorium on the issuance of policies, the Association shall remove its moratorium. After removal of the moratorium, the Association shall offer new policies with a waiting period of no longer than six months for the policy coverage to take effect.
SB 589 was signed by the governor on May 6, 2015.