Hurricane Insurance – Hawaii’s Unique Challenges

A recent Hawaii News Now report raised concerns for many Hawaii property owners, particularly those with older single-wall rental homes. According to the story, State Farm plans to stop issuing or renewing hurricane coverage for certain rental properties built with single-wall construction.

While Hawaii Insurance Commissioner Scott Saiki suggested that spreading risk among multiple insurance carriers may help strengthen the overall insurance market, the change could still have significant impacts on property owners. Insurance availability affects financing options, ownership costs, rental income, resale value, and the pool of potential buyers. Higher insurance premiums can also contribute to increased housing costs over time.

This situation highlights how Hawaii real estate differs from many mainland markets. Factors such as single-wall construction, hurricane exposure, lava zones, oceanfront conditions, roof age, and rental use can all influence insurance underwriting and lending decisions. Local expertise is especially valuable because experienced Hawaii lenders and real estate professionals often identify potential issues before they become obstacles during a transaction.

Importantly, this does not mean older single-wall homes are uninsurable or undesirable. Many continue to provide essential workforce and kama‘aina housing throughout the islands. However, it does reinforce the importance of understanding insurance and financing requirements early when buying, selling, renting, or investing in Hawaii real estate.

When you are ready to sell, reach out to me!
I will make sure your Waikoloa home hits the market with the right price, gets noticed and gets sold!