Lava Disaster Claims and Homeowner's Insurance in Hawaii

Don't just melt if your claim is denied; a lawyer can help

By Benjy Schirm, J.D. | Last updated on January 26, 2023

Hawaii is a place that many dream to live out their silver years in peace and security. But what happens when this island splits open and active volcanoes that created this paradise come to take it back?

Entire neighborhoods were buried in lava from the Kilauea eruption in 2018. Geologists are saying that these eruptions and devastation will possibly continue for years to come. What can homeowners do in the face of lava damage? Fortunately for people who have a homeowners insurance policy, they will probably be covered.

“A typical homeowner’s policy sets out what is excluded, and there is no specific exclusion for volcanic eruption,” says Honolulu insurance coverage attorney Tred R. Eyerly. “There are some provisions that could restrict or reduce the coverage. There are some policies that have specific endorsements for property damaged by lava flow or volcanic eruptions. Typically, if it’s not excluded in your policy, then it is going to be covered.”

Many people will be covered and will receive compensation for their losses, but that’s not the whole story.

“There are other problems we’ve heard about that homeowners may encounter,” Eyerly adds. “Some policies have exclusions that the insurers may bring up in order to deny a property damage claim like earth movement. Fire is usually covered, but a big one we are seeing is earth movement. There are a lot of earthquakes going on and perhaps damage may be excluded under this thought.”

Being uninsured or under-insured is another potential problem, Eyerly notes. “In the Punta district on Hawaii’s big island, many homes are self-constructed and often don’t have homeowner’s insurance because they don’t have a mortgage and many owners don’t see a need for it. Or we are seeing many policies that haven’t been updated for the value of the improvements they have made on the property.” Other structures or improper valuations are often a risk when natural disasters hit.

But if an insurance company quickly denies your claim, don’t give up—especially in these natural disasters.

“There is a doctrine in Hawaii that has been around for over 100 years and it’s called the efficient proximate cause doctrine, which says, ‘If there is more than one cause to a loss such as earth movement and fire, the earth movement wouldn’t be covered but fire would be, but just because there is earth movement may not mean there is no coverage.’ Under Hawaiian law, while some causes may be excluded, others may still be applicable. So, it is important that if an insured person thinks anything is incorrect or suspect, they should absolutely consult with a coverage lawyer.”

To properly evaluate the worth of a property, one should call an insurance agent. But when there is a disaster and people are fighting back and forth with insurance companies about coverage, that’s when an attorney comes in handy.

“I have one client who has two properties on the big island, both completely destroyed by lava, and he needed a policy evaluation and a proof of loss to get the maximum amount of coverage,” Eyerly says. “Certainly, if the claim is being denied, but if you think you aren’t receiving enough, an attorney can help you get adequately compensated.”

For more information on this area, see our insurance coverage law overview.

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