Lloyd’s reverses denials, pays Kilauea insurance claims

Nov. 27--After a tough year, Big

Island residents Philip and Lunel Haysmer cried when they got the news.

The retired couple from California recently learned that Lloyd's of London had reversed its earlier decision denying their insurance claim for the Leilani Estates home they lost during Kilauea's eruption earlier this year.

"My wife and I broke into tears," he said of their reaction.

Lloyd's initially denied

the claims of the Haysmers and dozens of other Puna

homeowners who lost their homes and had Lloyd-sponsored policies through

Monarch E&S Insurance

Services and other companies, according to Jeffrey Foster, a Kona attorney who represents about 20 such homeowners.

The company had a change of heart after a

preliminary court ruling earlier this month favored the homeowners, he said.

Several homeowners

with Lloyd's policies filed lawsuits, alleging bad faith, deceptive trade practices and breach of contract by the company and other businesses involved in selling the policies, which had a vague but controversial "lava exclusion" provision

in the documents.

More than 700 homes were destroyed by Kilauea's eruption, though not all were insured through Lloyd's.

Some homeowners already have received their claim checks from Lloyd's. The checks covered the

policy limits plus 10 percent interest. Foster expects the combined payouts to total tens of millions of dollars. Foster declined to specify how much Lloyd's paid to homeowners.

Despite the payments,

the lawsuits will proceed,

according to Foster, and he expects to add more clients in the coming days.

"We're trying to create a financial disincentive for Lloyd's of London or anyone else to ever treat people in Hawaii this way," Foster said. "People lost everything. I can't think of a worse response on how Lloyd's dealt with this tragedy."

A representative for Lloyd's could not be reached for comment.

The Haysmers, who retired after selling an art gallery they owned in California, bought their

Leilani Estates home in 2011 and moved in the following year. They paid nearly $3,000 a year for their homeowner's insurance.

According to their lawsuit, no one from Lloyd's or another company ever visited the Haysmers' property to inspect the damage.

An unlicensed claims adjuster from an unlicensed claims adjusting company in Little Rock, Ark., denied the claim, the lawsuit alleged.

Other Puna homeowners who lost their homes and had Lloyd's-sponsored coverage through Monarch and other companies also received denials, according

to Foster.

The denials came as the homeowners were trying to figure out how to recover from the natural disaster.

"People were left in this purgatory about what's going to happen after losing everything," Foster said.

When lava started to threaten the Haysmers' home, Philip Haysmer, 77, said he received only

15 minutes' notice to evacuate. He has not gone back to the property since.

The home eventually was destroyed by fire.

They couple stayed temporarily with a family who had a home along Highway 130 before finding a rental in Volcano, where they're currently living. He said the help they received from the family and others, including the federal government and Red Cross, has made a big difference during difficult times.

"This has been one of

the most trying times of my life," Haysmer said.

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