Spring brought to the Puna District of the Big Island numerous volcanic eruptions causing extensive loss of property. As of late May, the lava was moving at a speed to cover six football fields an hour according to the U.S. Geological Survey. Two dozen recent fissures have created lava fountains and explosions during the eruption. Fissures have been seen spouting lave over 200 feet into the air. Numerous homes have been destroyed.
Residents who have secured a Homeowners 3 ISO Policy may have some coverage for their loss related to the volcanic eruptions. The policy states it will "insure against risk of direct physical loss" to dwellings and other structures unless specifically excluded by the policy. Volcanic eruption is not excluded under the standard Homeowners Policy. Moreover, some policies have a specific endorsement to cover loss to a dwelling or other structures caused by volcanic eruption/lava flow. Coverage is provided for loss caused by the eruption, explosion, effusion of a volcano, or a moving outpouring of lava. Fire or explosion resulting from volcanic eruption should also be covered. And insurance should be available for vandalism or theft due to looting from a home where the owners are displaced.
But some loss related to a volcanic eruption will not be covered. Damage from earth movement is typically excluded. This includes earthquake, land shock waves or tremors before, during or after a volcanic eruption. Damage to land, trees, shrubs, lawns, etc. is not covered. The cost of removing ash from land surrounding the dwelling is also not covered.
If a homeowner is unable to obtain a policy in the private market, coverage may be available from the Hawaii Property Insurance Association, a nonprofit collection of insurance companies created by statute in 1991 to provide basic property insurance. Any insurance agent can assist in applying for such a policy. The catch, however, is that uninsured homeowners must wait six months before the policy becomes effective.
Only a handful of cases addressing coverage for volcanic eruptions have been issued by courts across the country, probably because there are so few areas exposed to active volcanoes. The Washington Supreme Court addressed coverage issues in 1983 after the eruption of St. Helens. The insureds’ homes were destroyed by a mud flow ten hours after the eruption began. Coverage was denied under an earth movement exclusion. The trial court granted summary judgment to the insurers.
The Washington Supreme Court determined it was unclear whether the eruption or earth movement caused the damage. Under the efficient proximate cause doctrine, the court noted that the efficient or predominant cause which sets into motion the chain of events producing the loss is regarded as the proximate cause, not the last act in a chain of events. If the predominant cause is a covered peril, there was coverage under the policy. The mud flows that caused the destruction of the homes would not have occurred without the eruption of St. Helens. Therefore, the case was remanded for the jury to consider whether the mud flows or the eruption were the proximate cause of the damage.
Hawaii courts have also adopted the efficient proximate cause doctrine when two or more perils combine to cause a loss. Therefore, if the insurer claims earth movement from the Kilauea eruptions caused damage to the home, coverage may still be available if fire or other perils that originated from the eruptions were the primary cause of the damage.
Our thoughts and prayers remain with the residents of the Puna District.
