Council asks state to intervene in insurance crisis

County Council members and Puna residents alike are urging action by the state to stave off a burgeoning insurance crisis that threatens to drastically increase policyholders' premiums.

Last month, Universal Property and Casualty Insurance Co. of Florida announced that it would be leaving the state's homeowners, condominium and renters insurance market, forcing about 1,500 policyholders statewide to find coverage elsewhere.

But for the about 900 policyholders in Lava Zones 1 and 2, that is easier said than done.

Several Puna residents have found that UPC was the only insurer covering their area, with only one alternative: the Hawaii Property Insurance Association, a state insurance provider of last resort that underwrites insurance coverage for those unable to find it through other providers.

But HPIA might not be a viable choice for many. Residents have said their insurance premiums would increase by 400% or more under HPIA, which would push Lava Zones 1 and 2 outside of the realm of affordability.

"Our premiums would go from $1,350 a year to $6,700 a year, counting hurricane insurance," said Hawaiian Shores resident Suzanne Frey at Tuesday's meeting of the council's Committee on Governmental Operations and External Affairs.

Suzanne Frey's husband, Les Frey, added that HPIA's proposed rates would be some of the highest in the country, on par with certain areas of Florida.

Fellow Hawaiian Shores resident Rose Riley told the Tribune-Herald that her previous coverage cost $747 a year, but would balloon to $7,384 a year under HPIA, an increase of nearly 1,000%.

"I'm retired, I'm on a fixed income, and this is completely unaffordable," Riley said. "A lot of people are thinking of selling their homes. People don't have an extra seven grand in their budget … and that's not even getting into how insurance policies have been going up 25% each year."

A resolution introduced and passed at Tuesday's committee meeting urges HPIA, the state Department of Commerce and Consumer Affairs and the state Legislature to take immediate action to explore solutions to the problem, ranging from implementing subsidies or financial assistance programs for residents of Lava Zones 1 and 2, creating a risk-pooling mechanism, and extending HPIA coverage to commercial businesses.

Puna Councilwoman Ashley Kierkiewicz, who introduced the resolution, said the situation is a looming crisis the state needs to get ahead of.

"(UPC) is leaving at the end of August 2024," Kierkiewicz said. "After that, people are going to see their premiums go up to $600, $700 a month. How are people on fixed incomes going to afford that?"

Kierkiewicz added that Puna is one of the last affordable places to live in the entire state, and that the skyrocketing premiums could lead to a mass exodus from the district.

Dozens of residents submitted additional written testimony asking for aid.

Pahoa resident Andrea Rosanoff noted that HPIA was expressly set up in state statutes to "provide appropriately priced basic property insurance" for residents of high-risk areas, and suggested that insurance rates quintupling the instant the last provider leaves town is the exact sort of situation HPIA exists to prevent.

Leilani Estates resident Nancy DeMello lamented how unaffordable Puna has become.

"Each month it's bill after bill, it's hard to do anything extra, even eating out is a luxury, gas, food, everything in Hawaii is expensive," DeMello wrote. "Why is it necessary to charge us so much? I paid plenty over the years and barely even got anything for repairs after the eruption."

Residents warned that, if rates are allowed to rise so high in Lava Zones 1 and 2, similar hikes will follow elsewhere.

"There will be wildfire risk maps coming after this, sea level rise risk maps," Les Frey told council members.

Riley said she has spoken with lawmakers including Puna Rep. Greggor Ilagan about potential legislative solutions, but recent events have left her skeptical that anything will be done.

"I thought Ilagan's ideas might have been good, but now, after what's happened on Maui, I'm sure most of the available funding next year will go to them, and rightfully so," Riley said.

Riley suggested that the U.S. Geological Survey revisit the Lava Zone maps entirely, saying that her property, despite being in Lava Zone 2, hasn't had a lava flow on it in the last two centuries.

In lieu of immediate solutions, Riley said a public meeting will be held Wednesday, Aug. 23, at the Hawaiian Shores Community Center, which will be attended by county and state lawmakers and representatives from HPIA and the state insurance commissioner's office.

"We have a lot of questions for them," Riley said, adding that she wants to see the actuarial data HPIA is using to determine the cost increases.

"For me, not having insurance isn't an option," Riley went on. "Right now, I can't foresee being able to afford to live in Hawaii for much longer."

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.