The Honolulu City Council resolution calls on the state Legislature to address what it deems a “substantial” increase in insurance premiums paid by homeowners across Oahu, especially condominium owners.
Director Val Okimoto’s Resolution 242, being considered by the Board’s Administrative Affairs and Legal Affairs Committee at 1 p.m. today, asserts that recent catastrophic weather-related crises are impacting the U.S. insurance industry. .
These catastrophes, including the devastating Maui wildfires of August 8, 2023, which caused an estimated $5.5 billion in damage in Lahaina and Kula, have forced homeowners to pay higher premiums to maintain coverage. , the bill states.
“In 2023, the United States experienced its largest event ever, with 28 weather- or climate-related disasters, each resulting in more than $1 billion in damages,” the resolution states.
In the same year, “The global reinsurance market experienced losses of more than $100 billion for four consecutive years, and increasing global climate change has caused national reinsurance premiums to rise as much as 50 percent annually in recent years.” These cost increases are primarily passed on to policyholders.”
While these impacts are hitting homeowners in Hawaii hard, owners of high-rise condominiums have unique challenges, the law says.
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“There are only three insurance companies in the state that provide condominium associations with basic insurance for common areas of condominiums, and coverage is often limited to 20 to 30 percent of a building’s hurricane damage.” says Resolution 242.
As a result, condominium owners and their associations in particular have been forced to utilize surplus insurance companies to cover the remaining portion of hurricane damage to their buildings, and these surplus insurance policies carry higher interest rates. , resulting in more expensive master premiums and higher deductibles,” the resolution states.
“These increased premiums for condominium association insurance, in some cases up to 1,000 percent higher, are passed on to condominium owners, resulting in significant increases in management costs and … condominium owners pay monthly premiums.” This has resulted in additional costs of several hundred dollars,” the law states. .
The resolution notes that during the last legislative session, the state Legislature introduced measures to address or stabilize rising property insurance premiums, specifically House Bill 2686 and Senate Bill 3234.
“Congress ultimately failed to pass or enact these measures,” the resolution states.
Still, Resolution 242 focuses on actions taken by Hawaii’s top elected officials.
On June 28, Gov. Josh Green established the Executive and Legislative Condominium and Real Estate Insurance Task Force to assess the “extreme challenges and complex issues” surrounding real estate insurance and make recommendations.
Based on the task force’s recommendations, the governor signed an emergency proclamation by August 7 aimed at stabilizing Hawaii’s volatile condo insurance market.
The measure would make loans available to the Hawaii Hurricane Relief Fund and the Hawaii Real Estate Insurance Association, making it easier to issue hurricane and real estate insurance policies to condominium associations.
The resolution would also allow HHRF to issue hurricane insurance for large condominiums and set its own coverage limits.
But Okimoto says Congress needs to do more.
“If property insurance premiums continue to rise, the impact on District 8 and Oahu as a whole will be significant. The increase could double or triple your monthly maintenance costs,” she told the Honolulu Star-Advertiser in an email.
On the issue of insurance premiums, Okimoto said he has spoken with local residents and referred them to state legislators because “we have a duty to address these types of issues through legislation.”
The council, through its committees, will also consider proposed amendments to the fire sprinkler retrofit ordinance in two separate measures that will be considered at Thursday’s council committee meeting.
At 9 a.m., the Public Safety Committee is scheduled to review the Honolulu Fire Department’s Bill 55, which relates to the adoption of the 2021 State Fire Code, subject to amendments applicable to the city.
At 1 p.m., the Public Infrastructure Technical Committee will review Bill 62, which relates to fire safety.
The meeting will be held in the Honolulu Hale Council Chambers, 530 S. King St.
