Homeowners, renters face limited flood-insurance options

Homeowners and renters who did not purchase specific flood insurance before back-to-back Kona-low storms battered the islands likely will have to absorb any financial losses to their homes and property, according to the head of Hawaii's insurance division.

Traditional homeowners' and renters' insurance policies that are not accompanied by separate flood insurance would not cover claims for damage or destruction caused by floodwaters that came "from the ground up," said Sam Thomsen, investigations branch chief for the state Department of Commerce and Consumer Affairs.

Homeowners could be compensated for damage caused by rainwater that came into a home through a lost or damaged roof, but there have been limited reports of roofs that were blown off in either the first or second Kona-low systems that first battered Oahu, Maui and Hawaii island beginning March 14.

Or they could be covered if "wind-driven rain or flying debris smashed out your window," Thomsen said.

"If my roof flew off and I got rain in, my homeowners insurance might apply, but I haven't seen a lot of that," he said. "It didn't seem to be the case on a wide scale."

In most cases, residents file insurance claims 30 days or so after a disaster so it's unclear how many claims might be filed and how many will be rejected.

But what is clear is that the aftermath of the Kona-low storms represent the latest challenge for an insurance industry that continues to pull out of the Hawaii market or refuses to underwrite policies for hurricane and lava coverage in parts of Hawaii island's Puna District and are looking for reasons to remain on Maui following the 2023 Maui wildfires or offer coverage to aging condo associations across the state facing overdue maintenance and facility upgrades.

Many of the people who fled the North Shore were renters and few of them likely purchased renters' insurance, let alone renters' flood insurance, Thomsen agreed.

"You're just saving up trying to make things stretch where you can and so you're probably rolling the dice on certain things, for sure," he said. "So most people don't."

Vehicle owners who suffered damage or a total loss also would be unlikely to be compensated by their auto insurance companies if they did not buy "comprehensive" or "other than collision" coverage that exceeds minimum insurance for major damage or catastrophic injuries or death.

Oahu's North Shore was littered with abandoned vehicles that flooded and died in the early hours of Friday morning during frenzied escapes to safety.

Like tenants and renters who purchased specific flood insurance in advance, Thomsen said that vehicle owners who bought "comprehensive" or "other than collision" coverage would likely be compensated for damages or repairs caused by the storms and subsequent flooding.

But for vehicles that are determined to be a total loss, owners would only be paid to purchase a used vehicle similar in age, wear and tear and mileage — not for the cost to buy a new, replacement vehicle, he said

Nonprofit organizations have stepped in to help with food, supplies and clothes.

And counties and state officials continue to survey damaged areas and calculate damage assessments that are likely to drive up the initial damage estimate of $1 billion.

Counties also continue to ask residents to file online forms to report any damage and losses.

The initial damage from the first storm did not rise to the level to prompt Gov. Josh Green to seek federal aid but damage assessment continues to pour in following the second one that left Hawaii County under a flash flood watch Monday night.

"I know people have a lot on their plates right now, but that (filing online damage reports) is something that would be helpful," Thomsen said. "They can make the different reports count."

If the Federal Emergency Management Agency does get involved, both property owners and their renters could seek assistance — but not enough that's likely to cover their overall losses.

For property owners faced with few insurance relief choices, Thomsen said that one of their limited options would be to apply for low-interest loans to cover their costs to rebuild.