Navigating the Property Insurance Landscape in Hawaii: A New Dawn for Condo Owners

Aloha, potential condo purchasers, investors, and homeowners! Exciting developments are underway in our beautiful State of Hawaii, which could significantly impact condo purchasers and current owners. Governor Josh Green, M.D., has taken a monumental step to stabilize Hawaii's property insurance market, a move set to ease the heavy burden of soaring insurance premiums and limited coverage options that has plagued many residents.

On July 7, 2025, Governor Green signed Senate Bill 1044, now Act 296, into law. This crucial legislation aims to stabilize the property insurance market amidst growing concerns over escalating premiums exacerbated by local and national environmental disasters. Here's what you need to know about this transformative change.

Understanding Act 296: A Lifeline for Condo Owners

Act 296 reactivates the Hawaiʻi Hurricane Relief Fund (HHRF), a program initially formed in 1993 in response to Hurricane Iniki. This fund is resurrected to provide commercial hurricane property insurance where private markets fall short, particularly benefiting Condominium and Townhouse Associations of Apartment Owners (AOAOs). Applications are now open for those seeking this vital coverage.

Governor Green emphasized the collaborative efforts that led to this breakthrough, acknowledging the immense challenge rising insurance costs posed for Hawaiʻi residents. Senate Commerce and Consumer Protection Committee Chair Jarrett Keohokalole hailed the bill as a lifeline, providing much-needed relief.

Key Components of Act 296

1. Hawaiʻi Hurricane Relief Fund (HHRF): This fund is geared to assist AOAOs by offering hurricane insurance to those previously denied coverage. The program promises full or partial coverage, significantly reducing costs and enhancing market competition.

2. Condominium Loan Program: Aimed at maintaining insurability, this program provides low-interest loans for essential repairs and deferred maintenance—improvements that can lower premiums and increase property values.

3. Comprehensive Market Study: The Insurance Commissioner is tasked with a study to develop sustainable strategies for long-term market stabilization, ensuring a reliable insurance landscape.

Representative Scot Z. Matayoshi highlighted the bill’s focus on average condominium buildings, not luxury high-rises, aiming to enhance market capacity and return many associations to affordable insurance markets.

Eligibility and Application Process

To apply for hurricane insurance under the HHRF, an AOAO must meet the following criteria:

- Previously denied coverage by at least two state-licensed insurers in Hawaiʻi.

- Buildings with a total insured value exceeding $10 million.

The provided insurance only covers hurricane-related losses above $10 million, requiring separate primary insurance for coverage up to this amount. Applications must be submitted through a licensed insurance producer.

Positive Impact and Future Outlook

The reactivation of the HHRF is already showing positive results. Acting Insurance Commissioner Jerry Bump noted a decrease in coverage costs due to increased competition. Moreover, Alex McLaury from ACW Group reported significant premium savings for properties.

This legislative change marks a proactive approach to ensuring safe, stable, and insurable housing for all Hawaiʻi residents, addressing a critical need in the face of climate challenges. For condo owners and potential buyers, this initiative provides a beacon of hope and relief in navigating the often tumultuous insurance market.

Stay informed and explore your options as this transformative policy unfolds, offering much-needed security and financial relief for Hawaii’s condo community. Mahalo!