Senate committee guts lava zone insurance bill
The state Senate’s
The committee moved to alter House Bill 20 by replacing its “substantive language” with a directive to the state’s
In its original form, the bill called for the creation
of a “lava zone insurance fund” meant to subsidize the cost of property insurance for homes in lava zones 1 and 2 on
island.
This would, according to the bill’s now-discarded text, ensure that residents don’t become displaced due to a sudden rise in insurance premiums, while also reducing the “disproportionate burden placed upon homeowners because of the geographic location of their properties.”
“The Legislature additionally finds that subsidizing the cost of insurance premiums for properties in these zones will promote fairness, affordability and accessibility in the insurance market,” HB 20 stated before its amendment, “encouraging home ownership and community resilience in these unique geographic areas.”
The bill was introduced by state Rep.
After the committee vote on
“I did not see this coming,” he told the
the bill into a study,
unfortunately.”
Even with this setback, though, Ilagan said he understands that rewriting the bill was likely the only way to keep it alive.
“I get it,” he said. “If a study needs to happen first, then it’s something that I will support. Because if I don’t, then this probably would die. At least we can have further discussions and figure out what we could agree on … but unfortunately, that’s where we’re at, and I’ll work with the
It’s possible that as the bill progresses through the
“We could possibly agree to remove the study … we could possibly agree to put the subsidy back in,” he said. “The possibility is there.”
Ilagan’s support for the bill is not the first time the Legislature has tried to assist lava zone residents. In 1991, the
The association is a nonprofit, unincorporated body often characterized as a “safety net.” It’s run by a board of directors comprised of eight insurance companies and four
Hawaii’s current insurance commissioner is
“While the department recognizes the significant insurance affordability
challenges faced by
homeowners in high-risk volcanic hazard areas” he wrote, “(this bill) raises significant regulatory, fiscal, and market concerns.”
One of those concerns is how the proposed subsidies could put more people and homes in harm’s way, and make those living under the greatest threat of lava inundation reliant on government assistance in order to survive.
“Subsidies mask the true cost of risk, (and) may encourage development and continued habitation in areas with the highest expected loss exposure, and create long-term dependence on state support rather than market-based solutions,” Saiki wrote.
Saiki’s testimony was one of just a handful in opposition to the bill, with the vast majority voicing support for creation of the assistance fund. Most came from homeowners living in lava zones 1 and 2, who described financial hardships brought on by spiraling insurance premiums — which can sometimes amount to “second mortgage
payments.”
“This is an untenable situation to be punished for an event that only occurs once every 50 years,” wrote
Another testifier,
“Who can afford
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