Hawaii Residents Encouraged to Review Insurance Policies and Deductibles

As hurricane season approaches and Hawaii residents prepare their 14-day emergency kits, Insurance Division would like to encourage consumers to review their insurance policies and understand their deductibles.

“It’s important to know what your policies cover before a disaster strikes so that you have the coverage you need to minimize significant financial impact on you and your family,” said Commissioner Colin M. Hayashida. 

“Most homeowners will purchase a policy, renew it year after year, and forget to take into consideration that renovations and extensions need to be added to the insurance policy. Even if the homeowner has not made improvements, the increased costs of re-building will impact coverage.  Every homeowner needs to review their insurance policies to ensure they have adequate coverage to rebuild and replace their losses,” said Hayashida.

Consumers need to be aware that standard homeowners and renters insurance policies do not cover hurricane and flood damage. Hurricane insurance can be purchased separately or endorsed onto the policy to supplement home insurance to cover hurricane related damages. Homeowners need to keep in mind that once a tropical storm approaches our islands, insurance companies may issue a moratorium and stop writing any new policies. 

In addition, damage caused by flood is not covered by homeowners or hurricane insurance.  Because flooding can occur anytime and anywhere, even if you are outside a high-risk area, it is important for consumers to consider adding flood insurance coverage. Consumers who purchase a National Flood Insurance Program policy need to plan ahead as there is typically a 30-day waiting period for the policy to go into effect.

“To avoid any surprises, consumers also need to understand their deductibles.  Your deductible is what you pay out of pocket before your insurance kicks in.  It is important to review the deductible amount and periodically thereafter to ensure that you can pay it if disaster strikes,” said Hayashida.  

The deductible for a homeowners policy is typically a set dollar amount, potentially ranging from $500 to $5,000. There is often an additional deductible for catastrophic coverage, such as hurricane and earthquake. The additional deductible is often expressed as a percentage of the homeowners’ dwelling coverage (Coverage A) limit. For example, if the homeowners insurance Coverage A limit is $400,000 then a five percent deductible for catastrophic coverage would amount to $20,000.

Consumers should check their policy’s Declarations page to understand the amount of their hurricane deductible and contact their agent or insurance company if they have any questions.

Additional information on flood and hurricane insurance can be found on the Insurance Division’s website under Consumer Resources at cca.hawaii.gov/ins/resources/