The national guide covers the homeowners forms (HO-2, HO-3, HO-4, HO-5, HO-6, HO-8), Coverages A through F, the additional coverages and the common exclusions. Hawaii's state questions on homeowners focus on property insurance rules in HRS Article 431:10E and on Hawaii's catastrophe exposures: hurricanes, lava flows and earthquakes. Hawaii's residual markets (the Hawaii Property Insurance Association and the Hawaii Hurricane Relief Fund) and condominium insurance are covered in the Other Personal Lines / Other Property Insurance guide.

National concepts in brief

• Section I covers property:
  • A: dwelling.
  • B: other structures.
  • C: personal property.
  • D: loss of use.
• Section II covers liability:
  • E: personal liability.
  • F: medical payments to others.
• Forms:
  • HO-3 covers the dwelling on an open-perils basis and personal property on a named-perils basis.
  • HO-4 is for renters.
  • HO-6 is for condominium unit owners.
  • HO-8 is for older homes, with actual cash value or functional repair settlement.
• Replacement cost and coinsurance: replacement cost pays without deducting depreciation if the home is insured to at least 80% of its replacement cost.
• Special limits apply to items such as jewelry, money and securities. Scheduling the item on a floater gives full coverage.
• Flood and earth movement are excluded from standard homeowners forms. Flood is bought through the NFIP or a private flood insurer, and earthquake by endorsement or a separate policy.
• Business pursuits are excluded from the homeowners liability coverage.

Hawaii rules on homeowners inquiries

• An inquiry is a call or contact that asks about coverage without filing a claim. In Hawaii it is not a claim (HRS 431:10E-123).
• An insurer may not use an inquiry to refuse, cancel, nonrenew or rate a homeowners policy. The one exception is an inquiry that reveals information the insured had not disclosed before (HRS 431:10E-124).

Writing and withdrawing residential coverage

• An insurer that wants to write multi-peril coverage for residential property in Hawaii must first ask the commissioner in writing. If the commissioner disapproves, the insurer may not write it (HRS 431:10E-152).
• An insurer that plans to stop writing property insurance in Hawaii must file an affidavit with its reasons 13 months before it stops (HRS 431:10E-151).

Lava zones

• A lava zone is a volcanic hazard zone identified by the U.S. Geological Survey on the island of Hawaii (HRS 431:10E-141).
• When the Hawaii County mayor proclaims an emergency because of an imminent lava flow, an insurer's property nonrenewals in that lava zone are limited to 5% of its policies in force there each year (HRS 431:10E-142).
• Even then, an insurer may cancel or nonrenew for nonpayment after demand, or if its financial soundness would be impaired.

Over-insurance and valuation

• Over-insurance means insuring property against the same hazard for more than its actual cash value, which Hawaii defines as replacement cost minus depreciation (HRS 431:10E-102).
• A producer may not knowingly sell coverage that would over-insure. Exceptions (HRS 431:10E-103):
  • replacement cost coverage on buildings and household furnishings;
  • coverage for the extra cost of demolition and rebuilding to meet laws or ordinances.
• Insurable interest: a property policy is enforceable only for people with an insurable interest, meaning a lawful, substantial economic interest in keeping the property safe (HRS 431:10E-101).

Discrimination rules that affect homeowners

Under HRS 431:13-103(a)(7), an insurer may not refuse, cancel or limit residential coverage because of:

• the age of the home, unless there is a genuine business reason or the law requires it;
• its geographic location, unless there is a genuine business reason or the law requires it;
• the applicant's sex or marital status;
• the applicant's physical or mental impairment.

Hurricane coverage

• Hurricane-prone Hawaii policies often apply a separate hurricane deductible, usually a percentage of the dwelling limit.
• The Hawaii Property Insurance Association may not provide hurricane coverage (HRS 431:21-109).
• The Hawaii Hurricane Relief Fund can sell hurricane policies when its board finds the private market is not making that coverage reasonably available (HRS 431P-4).

Common exam traps

• An inquiry is not a claim in Hawaii and can't be used against the homeowner unless it reveals something new.
• An insurer leaving the property market gives 13 months' notice.
• The lava-zone nonrenewal cap is 5%, and it applies only after the Hawaii County mayor proclaims an emergency.
• Replacement cost coverage is an allowed exception to the over-insurance ban.
• Flood and earthquake are excluded from standard homeowners forms.