The national guide covers the specialty personal coverages:

• Personal umbrella, which adds liability limits above the auto and homeowners policies.
• Personal inland marine floaters for jewelry and other valuables.
• Boatowners, mobile home and flood coverage.

In Hawaii, the state questions in this area focus on three Hawaii institutions: the Hawaii Property Insurance Association (HPIA), the Hawaii Hurricane Relief Fund (HHRF), and the insurance rules for condominium associations.

National concepts in brief

• Flood is excluded from homeowners policies. It is bought through the National Flood Insurance Program or a private flood insurer.
• Earth movement (earthquake or volcanic) is added by endorsement or a separate policy.
• A scheduled personal articles floater insures valuables for their appraised value, beyond the homeowners special limits.
• A personal umbrella sits above the auto and homeowners liability limits.

Hawaii Property Insurance Association (HRS Article 431:21)

Purpose: HPIA makes basic property insurance available when the voluntary market will not write it. It also supports market stability and spreads hard-to-place risks fairly (HRS 431:21-101).

What it covers:

• Basic property insurance means the perils of the standard fire policy and extended coverage endorsement (HRS 431:21-102).
• No hurricane coverage. The HPIA law does not authorize it (HRS 431:21-109).
• Lava zones 1 and 2, the two most hazardous USGS zones on the island of Hawaii (HRS 431:21-107(a)).
• High-rise condominiums (four or more occupied stories), for no more than 60 months.
• Other coverages statewide when the market for a category fails and the commissioner approves.

Who may apply: anyone with an insurable interest who cannot get basic property insurance from a licensed insurer (HRS 431:21-110).

Members: all authorized property and casualty insurers, except insurers that write only auto. Each member shares in HPIA's results according to its prior-year net direct written premiums (HRS 431:21-103). Members recoup assessments through a surcharge of no more than 2% of each policy's premium. Motor vehicle insurance is excluded from the surcharge (HRS 431:21-115).

Board: 12 members. Eight are chosen by member insurers, one represents producers, and three are public members appointed by the commissioner (HRS 431:21-104).

Process:

• HPIA may inspect the property within 10 days of the application (HRS 431:21-110).
• Appeals go to the HPIA board within 30 days of a decision (HRS 431:21-113).
• When a lava-zone moratorium on new residential policies ends, HPIA may impose a waiting period of up to six months before coverage starts (HRS 431:21-119).

Other points:

• Lenders must treat an HPIA policy the same as a similar policy from an authorized insurer (HRS 431:21-118).
• HPIA is exempt from state fees and taxes (HRS 431:21-114).

Hawaii Hurricane Relief Fund (HRS Chapter 431P)

What it is: the fund is placed within the DCCA for administrative purposes. It may offer hurricane property insurance when its board finds the private market is not making that coverage reasonably available (HRS 431P-2, 431P-4).

Key definitions (HRS 431P-1):

• A hurricane is a storm declared and defined as one by the Central Pacific Hurricane Center of the National Weather Service.
• A covered event is each hurricane that directly causes windstorm damage in Hawaii.
• Eligible property includes residential property, commercial property, tenants' personal property and condominiums.

Who may apply: an applicant who can show they are unable to get hurricane coverage from licensed insurers (HRS 431P-2).

The companion policy (HRS 431P-11):

• The property must have a companion policy: an underlying property policy that excludes hurricane.
• The fund's limits may not exceed the companion policy's fire and windstorm limits.
• Limits and deductibles are set by the fund's plan of operation, approved by the commissioner (HRS 431P-10).
• The fund must renew if premium is paid on time. It may nonrenew if the companion policy is gone.
• Lawsuits under a fund policy must be filed within one year.

Board and appeals: the board is the insurance commissioner plus six members appointed by the governor (HRS 431P-3). Appeals go to the board within 30 days (HRS 431P-13).

Guaranty protection: the fund and its policyholders are not covered by the Hawaii Insurance Guaranty Association. If money runs short, claims are prorated (HRS 431P-15).

Loss reduction: the fund must keep a loss reduction plan with building standards for new and existing structures (HRS 431P-12).

Condominium association insurance (HRS 514B-143)

Unless the declaration or bylaws say otherwise, the association must carry:

• Property insurance on the common elements, special form causes of loss, at full replacement cost less deductibles. It need not cover improvements and betterments that owners added.
• Commercial general liability of at least $1,000,000.
• A fidelity bond for associations with more than five units: $500 per unit, minimum $20,000, maximum $200,000.
• Directors and officers liability at a level the board considers reasonable.
• Flood insurance if the property is in a FEMA special flood hazard area.

Losses: losses are adjusted with the association and paid to it or to its insurance trustee. After notice and a chance for a hearing, the board may charge the deductible to the owner where the damage started.

Owners' insurance: with approval from a majority of owners, the board may require unit owners to carry insurance.

Common exam traps

• HPIA never covers hurricane. Hurricane coverage comes from the private market or the Hurricane Relief Fund.
• HPIA's lava-zone eligibility covers zones 1 and 2. High-rise condos can stay for at most 60 months.
• A Hurricane Relief Fund policy needs a companion policy that excludes hurricane. Suits must be filed within one year.
• Neither residual market is backed by the guaranty association.
• Condo associations need at least $1 million in liability coverage, and a fidelity bond of $500 per unit within a $20,000–$200,000 range.