Big Island Volcano Eruption: Does Insurance Cover This?

7 Replies

I would assume that insurance would exclude volcano eruptions. All these people being displaced from their homes in Leilani Estates, even if their home isn't destroyed, it's definitely gone down in value.

Does insurance cover any part of this?

Some years ago I looked at buying something in this area.  It is, or at least was, something of a wild west.  Lots of houses on lots the county thinks are vacant.  You can get insurance to cover volcano damage, just like you can get earthquake insurance in CA.  I found this on State Farm's site:

https://www.statefarm.com/simple-insights/residenc...

Kalapana, SW of Leilani Estates where the current flows are, was hit bad back in 1990 (?).  The folks who had it the worst were the ones who's houses weren't damaged, but were cut off by flows that covered the roads.  They received nothing from insurance, yet their houses were essentially worthless.

I have property insurance license in HI with some knowledge of underwriting, policy guidelines and adjuster point of view.  Individual cases aside, if your risk is too much of the probability (such as East Rift Zone 1), you eithth have grandfathered policy, uninsurable or premium is astronomical.  That is a prudent insurance business law of numbers.

http://m.hawaiinewsnow.com/hawaiinewsnow/db_330510/contentdetail.htm?contentguid=MOZqZVCt

From what I’ve read most of the damage won’t be covered under most policies. Some insurance companies will flat out refuse to offer it or cover it

My wife and I took a vacation there 3 years ago. I poked around and found many people living to the east without insurance. What insurance that was available, was not affordable. Those in the eastern zone, as Misa noted, are not covered. Much of the area is technically unincorporated and services can be difficult as they are not supported universally. Bring your own ... everything.

Hawaiians are hearty.

Real Estate on the northern coast of the Big Island is where an investor could prosper. I am optimistic that when this settles down there will be good opportunities. To the North and to the West. 

I plan on looking for some land in the fall.

My perception is everything is insurable. Insurance where lava WILL flow a couple of times in a lifetime is a good place to invest. Otherwise, Hawaii will survive and those who invest wisely will do well. 'Invest where you can insure' , would seem a good mantra.

"My perception is everything is insurable. Insurance where lava WILL flow a couple of times in a lifetime is NOT a good place to invest."

Building your house on top of a volcano is like building a house in Galveston on the beach.  You pays your money and you take your chances...stupid is as stupid does!

Originally posted by @Stephen Jackson :

Building your house on top of a volcano is like building a house in Galveston on the beach.  You pays your money and you take your chances...stupid is as stupid does!

 That was pretty much my conclusion after looking at this area.  Even the Kona coast had flows as recently as 1950.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here