What Has Changed About Property Insurance in Hawaii?

What Changed After Lahaina

The August 2023 Lahaina fires caused an estimated $5.5 billion in insured losses — one of the most devastating wildfires in modern U.S. history. Within months, major insurers reassessed their Hawaii exposure. Some reduced coverage limits. Some imposed exclusions for wind-driven fire. Some left the Hawaii market entirely. The state's FAIR Plan (insurer of last resort) saw applications surge dramatically.

The result is an insurance market that looks nothing like what buyers experienced even three years ago. Due diligence now requires explicit insurance verification before any offer — not as an afterthought, but as a primary qualification step.

Questions Every Buyer Must Ask

• Can the property be insured, and by whom?
• What is the current annual premium, and has it increased in the last 12 months?
• Are there wildfire exclusions or limitations on the current policy?
• Is the property in a high fire risk zone per state or county maps?
• For condominiums: what does the HOA master policy cover, and what gap coverage do owners need?
• Will my lender accept the available insurance coverage?

Condo Insurance: A Separate Issue

Condominium buyers face a layered insurance structure. The HOA carries a master policy covering the building structure. Individual owners need an HO-6 (unit owners) policy covering interior improvements, personal property, loss of use, and liability. The HOA master policy has become significantly more expensive — and some HOAs are now requiring special assessments to cover premium increases. Always review the HOA's insurance certificates and recent meeting minutes before closing.

High-Value Property Considerations

For higher-value properties, standard homeowners policies may not provide adequate coverage. Specialized carriers — Chubb, Pure Insurance, AIG Private Client — offer coverage structures designed for properties that exceed standard policy limits. These carriers also have more flexibility in high-risk areas and may offer better terms than standard carriers for well-built, well-maintained luxury properties.

→ Hawaii Insurance Division  

Jolanta's Feedback

I now ask every buyer to conduct insurance pre-qualification alongside mortgage pre-qualification. Find out if the property can be insured and at what cost before you fall in love with it. I can introduce you to insurance brokers who specialize in Hawaii property — including high-value and hard-to-place risks.