Hawaii Emergency Proclamation To Address Condo Insurance Crisis

Earlier this month, Governor Josh Green, M.D. signed an emergency proclamation to address Hawaii’s volatile condominium insurance market.

There has been an unprecedented rate increase due to a hardening global insurance industry and a recent increase in catastrophic events around the world.

Hawaii’s property insurance market faces significant challenges due to its small size, high real estate costs, and unique risk profiles. The insurance rates for condos in the state have skyrocketed as much as 1,000%.

With the possibility of similar rate increases for townhouses, the emergency proclamation aims to protect Hawaii homeowners and maintain market stability.

“The recent surge in condo insurance rates is placing an unbearable burden on homeowners across our state. This emergency proclamation is a critical step to stabilize our insurance market and protect our residents from further financial strain,” Gov. Green emphasized.

“By working closely with industry experts, federal partners, and legislative leaders, we aim to ensure that Hawai‘i remains a viable and secure place to live, even in the face of global insurance challenges. Our commitment is to safeguard the interests of our communities and provide stability for people living and working in Hawaiʻi.”

Through the emergency proclamation, a Joint Executive and Legislative Task Force was established to monitor the insurance market, implement short-term fixes, and recommend emergency changes or legislative proposals.

According to the press release, the emergency proclamation will lead to additional options for condominium associations to purchase hurricane and property insurance for their buildings including the following:

– Allows loans to be made to the Hawaiʻi Hurricane Relief Fund (HHRF) and the Hawaiʻi Property Insurance Association to facilitate the issuance of hurricane and property insurance policies to condo associations

– Allows HHRF to issue hurricane insurance policies for large condominium buildings and set its coverage limits

In a recent Task Force meeting, they found the following evaluation as laid out in the press release:

– Examining the insurance marketplace for trouble spots and urgent changes in insurers’ rates, refusals to write policie, or market exits.

– Determining existing legal authority for immediate fixes.

– Identifying statutory changes that can be waived via emergency proclamation or require legislative action, making recommendations for such actions.

– Engaging with federal stakeholders like Fannie Mae and Freddie Mac to support these efforts.

“I want to thank the Governor for accepting the recommendation of the Insurance Task Force and recognizing that we are in a state of emergency,” said House Speaker Saiki.