Question: Hawaii just dodged two hurricanes last week. Let’s talk about hurricane insurance. Do you know or have an estimate of how many homeowners in Hawaii have such insurance and how many don’t?

Answer: The Insurance Division does not keep track of that statistic. However, most mortgage lenders require homeowners to have hurricane insurance.

Q: How many companies offer hurricane insurance in Hawaii, and how has that changed over recent history?

A: There are 21 companies offering hurricane insurance. In recent history, we have seen a few companies come into the state to write homeowners and hurricane policies. Consumers can check out the Division’s Homeowners Premium Comparison guide to find out which companies offer hurricane insurance. The guide can be downloaded for free at cca.hawaii.gov/ins.

Q: How much does hurricane insurance cost?

A: The premium is based on the construction type of the dwelling and the deductible for the coverage. Discounts are often provided if homeowners take the necessary precautions to mitigate damage to the home caused by a hurricane, including the installation of roof clips and foundation anchors.

(According to sample premiums listed by the state at http://1.usa.gov/1kHY7FH, the annual premium can be as low as $374 for a masonry home built in 1990 with roof clips or as high as $2,611 for a single-wall wood home built in 1980.)

Q: Are premium rates regulated by the state?

A: Yes, homeowners and hurricane rates are regulated by the state.

Q: How often and by how much do rates increase or decrease?

A: This really depends on the line of business or product. Generally, if the cost to insurers go up as a result of losses, reinsurance or administrative cost increases, rates rise. Conversely, if these cost go down, rates would decrease. In 2011, the Insurance Division requested insurers to refile homeowners rates; as a result, there was a net reduction of over $10 million to homeowners and this savings continues year to year.

Q: Is having hurricane insurance purely optional?

A: Lenders will require it if there is a mortgage on the property. For homeowners that own their property outright, it is optional. However, we highly encourage homeowners without mortgages to consider purchasing a policy. As we saw with Iselle, the time to worry about being adequately protected is not during a storm. It is hard to predict the type of damage that can be caused by a hurricane, and it is better to be proactive by protecting your property and belongings.

Q: What kind of damage would hurricane insurance cover and not cover? For instance, if a hurricane creates floodwater that damages a home, is that covered? Or in the case of Iselle, which weakened into a tropical storm before it made landfall on Hawaii island, would wind damage be covered?

A: Flood damage is not covered under hurricane insurance. The type of coverage varies based on the insurer. Consumers should review their policy to see what is specifically included and excluded in their coverage. We also recommend talking with your agent now, before a storm is approaching, to get a better idea of what type of coverage you have, and the potential out-of-pocket expenses that might be incurred if a storm hits.

Q: Do insurers restrict when someone can buy hurricane insurance? For instance, could a homeowner buy a policy just before hurricane season starts, or while a storm is forming hundreds of miles away from Hawaii?

A: Yes, the market will react if they anticipate a catastrophic event, like a hurricane occurring. Most insurers will put a moratorium on writing new policies, including homeowners, hurricane, flood and motor vehicle, a few days before the storm is anticipated to hit the islands. Hence, consumers who wait too long will be unable to purchase insurance policies to cover losses to their home and motor vehicles.