Gov. Josh Green has issued an emergency proclamation to stabilize the insurance market where condominium buildings have been unable to secure full insurance coverage from one of the three companies operating in Hawaiʻi.
The proclamation would allow the state to loan up to $60 million in general funds to the Hawaiʻi Hurricane Relief Fund and the Hawaiʻi Property Insurance Association to issue insurance policies.
It would also allow the Hawaiʻi Hurricane Relief Fund to issue hurricane insurance again, which it has not done since the early 2000s.
The idea would be to use these loans to help alleviate pressure for condo owners in the short-term, without dipping into the about $160 million Hurricane Relief Fund, which has acted as part of the state’s reserve funds for the past two decades.
The proclamation is based on recommendations from the Insurance Task Force, which Speaker Scott Saiki co-chairs.
“It's really meant to be a temporary stopgap measure that will provide some limited relief to condo buildings by giving them one layer of potential insurance coverage that they would otherwise have to obtain through a foreign source,” Saiki said.
“So this is just meant to provide a layer of coverage that condo buildings can access,” he said.
Foreign sources of coverage are extremely expensive.
So the insurance policies permitted through the emergency proclamation are closer to the market rate.
Saiki added that other types of residences, not just condos, have started seeing dramatic increases in property insurance — which is why the task force recommended that the governor issue an emergency proclamation.
There was a measure that failed last legislative session that would have used the Hurricane Relief Fund as a mechanism to provide state-backed insurance policies for condominiums. Saiki said that it is an option the task force is considering recommending next year.
Buildings can contact the Insurance Division of the Department of Consumer Affairs to apply for hurricane coverage or the Hawaiʻi Property Insurance Association for other property insurance policies.
