Understanding the Hawaii Condo Insurance Crisis
What Led to the Condo Insurance Crisis?
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Natural Disasters and Rising Reinsurance Costs: Over the past few years, there has been a surge in natural disasters worldwide, including wildfires, floods, and hurricanes. These events have caused significant financial losses, leading to a challenging insurance market. Reinsurers, who provide insurance to insurance companies, have raised their rates to cover these increased risks. This has trickled down to primary insurers and, ultimately, to policyholders in Hawaii.
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Hawaii's Unique Challenges: Hawaii is particularly vulnerable due to its exposure to hurricanes and the prevalence of older buildings near the shoreline. These factors make it less attractive to insurers, who have become more selective, often offering reduced coverage at higher rates.
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Limited Insurance Options: Only a few insurers are willing to provide coverage for condos in Hawaii, and many are not taking on new business. This lack of competition has driven up costs and reduced options for condo associations seeking coverage.
Governor's Actions to Stabilize the Market
In response to the insurance crisis, Governor Josh Green issued a proclamation to stabilize Hawaii's condominium insurance market. The proclamation allows for:
- The use of state funds to support insurance entities in providing more affordable coverage.
- The relaxation of certain regulations to expedite the issuance of new policies and to increase available coverage.
- The involvement of the Hawaii Hurricane Relief Fund and the Hawaii Property Insurance Association to issue master policies directly to condo associations.
What This Means for Condo Owners
With these measures, the state aims to make insurance more accessible and affordable for condo associations and owners. However, it's crucial to stay informed about how these changes may affect your coverage and costs in the coming months.
While we do not see the end, we will keep you updated!
LINK to Condo Insurance Emergency Proclamation by Governor Green