Some relief might be coming for Puna residents struggling to afford insurance, even as possible state solutions to the crisis have once again fizzled out.
In 2023, large insurance provider Universal Property and Casualty Insurance Co. pulled out of the Hawaii market, leaving many of its roughly 1,000 Big Island policyholders with no coverage. With no other providers offering coverage in Lava Zones 1 and 2, Puna residents were left no choice but to seek home insurance through the Hawaii Property Insurance Association, a state-operated provider of last resort.
However, HPIA’s insurance premiums are high, and some residents reported their insurance bills quadrupling or more under HPIA.
As he did in 2024, Puna Rep. Greggor Ilagan once again introduced several bills this year to address the crisis, but no committee chair has scheduled any of those proposals to be heard.
“Insurance is a tough issue, and I haven’t been able to find a solution,” Ilagan said.
The three bills Ilagan introduced would have attempted to address the problem in several ways, some of which he acknowledged might have been a tough sell.
For example, House Bill 20 would have established a lava zone insurance fund to help subsidize insurance premiums for properties in Lava Zones 1 and 2 — something Ilagan said is probably the best solution the state could offer — but he admitted that might set an unwanted precedent.
House Bill 21 would have required the HPIA to at least provide coverage for commercial properties twice denied by private insurers, while House Bill 23 would have made the state insurance commissioner into an elected position beginning in 2026. Neither were any more successful than HB 20.
But where state solutions have failed, private insurers could prevail. Some small insurers have entered the Puna market to offer hurricane insurance, which could signal a shift in the greater insurance industry.
Former County Council member and president of the Hawaiian Shores Community Association Eileen O’Hara said the presence of small insurers in the market again could attract a large insurer, with competition helping to drive costs down again.
“It’s not the magic bullet, but it still breaks open the market,” O’Hara said, adding that her ex-husband saved about 40% from his HPIA coverage through one of the new providers. “That’s still more than what he was paying before HPIA, but when your insurance bill goes from $1,500 to $6,000, that’s hard on a fixed income.”
O’Hara said insurers are still skittish about Puna. Companies tend to get “a little more picky” after they sign up a certain number of clients — “they start to wonder why nobody else is providing coverage” — and at least one big insurer got spooked and aborted plans to enter the Big Island market after those plans leaked to the public, she claimed.
But still, O’Hara said, “there’s some hope on the horizon.”
In particular, O’Hara said, the Oahu-based insurer SwitchUp Insurance will host a community meeting at the Nanawale Community Association on March 15 to discuss insurance options in Puna.
Andrea Rosanoff, chair of the Puna Citizens for Affordable and Sustainable Property Insurance, said plans for a member-owned insurance cooperative are on hold for the time being, although she hopes it will remain under consideration in the future.
For now, Rosanoff said, she hopes the insurance industry will evaluate the risks of Puna in a better context. For example, the risk of fire in Puna is low — about 17 homes destroyed per year in Lava Zones 1 and 2 — compared to other parts of the island. The threat of lava to Puna homes, meanwhile, is also low, with the 2018 Kilauea eruption accounting for the vast majority of homes destroyed by lava in the last century.
“We’re a good market. We have a good ratio of number of claims to property value,” agreed O’Hara. “But we’re not a huge market, either.”
Ilagan said one way or another, the private insurance market must be a part of the solution to the crisis.
He said it’s too risky for the state to use taxpayer money to take on Puna residents’ liabilities, and any effort to build an insurance subsidy fund will take time, probably decades, to accumulate an effective sum.
But even if such a fund ever materializes, Ilagan said he is unsure if it would last.
“One thing I’ve realized is that long-term funds like the rainy day fund tend to get targeted to be used for other purposes,” he said. “While the private sector maybe has the fiscal responsibility to not touch money they’re saving, lawmakers have a hard time not doing that.”
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.
