Cost of Big Island Homeowners Insurance? (Honolulu, Leilani Estates: real estate, rental, lenders)

[bornintheusa1966]

Like many, we are considering a move to the Big Island. We're trying to work out a budget and I have read many many posts, all saying how expensive homeowners insurance is, and hard it is in Lava Zone 1 or 2, etc. But I cannot find any specific examples of actual prices. I'm only after ballpark figures. Could anyone answer any or all of these three questions:

1.) How much would homeowners insurance cost for a £300,000 home in Lava Zone 2 (eg Leilani Estates)?

2.) How much would homeowners insurance cost for a £300,000 home in Lava Zone 6 (eg Discovery Harbour)?

3.) Would the insurance pay out if the house was destroyed by a lava flow, or does it only cover everything except a lava flow?

Thanks in advance.

[StillHope]

Originally Posted by bornintheusa1966

Like many, we are considering a move to the Big Island. We're trying to work out a budget and I have read many many posts, all saying how expensive homeowners insurance is, and hard it is in Lava Zone 1 or 2, etc. But I cannot find any specific examples of actual prices. I'm only after ballpark figures. Could anyone answer any or all of these three questions:

1.) How much would homeowners insurance cost for a £300,000 home in Lava Zone 2 (eg Leilani Estates)?

2.) How much would homeowners insurance cost for a £300,000 home in Lava Zone 6 (eg Discovery Harbour)?

3.) Would the insurance pay out if the house was destroyed by a lava flow, or does it only cover everything except a lava flow?

Thanks in advance.

Hi,bornintheusa1966!
I was researching the insuranse issue recently.Lava damage is not covered.The fire is.Meaning ,if the fire destroys your house BEFORE the lava comes,you are OK.Otherwise...
So if I were you,I would buy in the areas unlikely effected by lava(zone 9-5).Or buy very cheap house you can replace.
I ended up buying only the land in lava zone 2 and planning to put a yurt house on it,which can be taken off in a day (lava usually gives you plenty of warning).Some people put their houses on the platform and drove off to the safer areas,I heard.I was trying to get the info how realistic and affordable that moving the house is on this forum,but noone answered.
Good luck!
StillHope

[cynmkolohe]

Aloha all,

The answers to these questions are best found by talking to a professional in the industry. There are constant changes in the factors that contribute to the actual number and many variables for each individual situation.

My best suggestion for those reserching homeowners insurance is to contact an agent in a local office and "talk story" about the ins and outs of getting coverage on the Big Island.

Here is a link for some general information: Department of Commerce & Consumer Affairs - Homeowners Insurance Information (http://www.hawaii.gov/dcca/areas/ins/main/faqs/homeowners/ - broken link) regarding homeowners insurance. If you would like contact numbers for local insurance agencies, please DM me and I will send you a list.

With aloha,

Cynthia

[Dreaming of Hawaii]

I think we pay around $700 a year in homeowner's insurance in Discovery Harbour. That may be high, since we use the house as a vacation rental rather than as our primary residence.

[terry murphy]

I live in North Kohala, which is in lava zone 9, so no danger from lava. We pay the basic rate for homeowner insurance of about $600 per annum, but the problem here is "hurricane insurance." It is added on as a second policy or included but with a separate very high deductible, like $4000 instead of the basic $1000 for everything else. And it will cost $1000 or more per annum. So our total annual insurance for a $400,000 home has been around $1600 per year. If you need flood insurance that is also extra. Also earthquake insurance, if you can get it, which you probably can't.
Recently our insurance bill has gone up to nearly $2000 per year, and I am still trying to find out why, though I would bet it has to do with raising hurricane insurance premiums. Many agents will give you the run-around, but when it comes down to it there is very little choice. The state has stopped providing their over-priced hurricane insurance, and many companies make you buy it separately from the sole carrier who supplies it, ("Zephyr," I am told - and Zephyr recently announced they will no longer cover homes more than 25 years old or any home with single wall construction, which is most of us).
The saddest thing is that in the event of a hurricane, Hurricane Iniki - which damaged two thirds of the homes on Kauai alone - has taught us that even very well-heeled insurance companies will simply allow their hurricane subsidiary to go bankrupt and refuse to pay. The statewide electric utility (HECO), which charges the highest rates in the world and owns a big bank (American Savings) and the monopolistic interisland freight company (Young Bros), owned the major insurance company providing homeowner insurance for Iniki (HIAA) and refused to honor their claims, and got away with it. Auwe!
Unfortunately, this sort of corruption is not just typical, it is part of the structure of things in Hawaii. My advice is to talk to insurance agents (not real estate agents) and discuss hurricane insurance particularly, as those premiums dwarf all others. And hurricane-proof your house as well as you can, because in the event that many homes are damaged or destroyed as with Hurricane Iniki, you are unlikely to get paid. The courts will side with the insurance companies, without a doubt.

Welcome to Hawaii, and aloha...


terry

[Mvn 2 Paradise]

Wow, that's depressing.

[Mvn 2 Paradise]

Where on the big island is flood insuranec necessary?

[cynmkolohe]

Department of Commerce & Consumer Affairs - Homeowners Premium Comparison Sheet

Try this link for additional information. Note that the rates in the PDF files is from, I think, 2004.

[cynmkolohe]

Originally Posted by Mvn 2 Paradise

Where on the big island is flood insuranec necessary?

Flood hazard zone designation can vary even with in a subdivision...it is a good idea to research every property individually.

Here is a 2006 Honolulu Advertiser article to consider: http://the.honoluluadvertiser.com/ar...605110326.html

"Most homeowners who buy flood insurance do so because they are required by their lenders. That's because they live in areas considered most vulnerable to flooding, the study found. Just 20 percent of homeowners living in the most flood-prone areas buy federal flood insurance when they are not required to do so, the study says...."

[Mvn 2 Paradise]

Cynthia, you have an amazing file cabinet!

Sharlee