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Homeowners Insurance Premiums in Hawaii

There’s nothing more exciting than buying your first home – and doing so in an island paradise like Hawaii is certainly no exception. But buying a homeowners insurance policy in Hawaii to protect your new investment is just as important as it is in any other state. As a matter of fact, paying attention to the coverages and specifics of your homeowners policy as a little bit trickier and the Aloha state. This difficulty has to do with its unique geographic challenges and the frequency of severe weather which often causes property damage to the islands.

Homeowners insurance within the state of Hawaii is similar to the Continental 48 and that insurance companies on the islands also offer standardized HO-3 insurance policies. These are fairly comprehensive policies that protect the total cost replacement of your House’s structure comma the actual cash value of replacing the contents of your home, personal liability, medical expenses, and a deductible you will owe your insurance company if you want them to pay out on a claim.

 

Type of Coverage Coverage Amount
Replacement Cost (Dwelling) $300,000
Replacement Cost (Contents) $150,000
Personal Liability $200,000
Medical Expense $1,000
Deductible $500

The table above gives recommended coverage limits for a masonry house structure built after the year 1996.  and in the table below, you will see average rates for homeowners insurance policies for the island of Oahu and also Hawaii’s neighboring Islands. Pickles attention to the fact that there are two quotes for each designation – one for a standard homeowners insurance policy, and one for a separate hurricane insurance policy.There are only two insurance companies in Hawaii that offer hurricane insurance coverage as part of a standard homeowners insurance policy. Those companies are Hartford Underwriters Insurance Co, and Bankers Standard Insurance Company. with Hartford, the hypothetical dwelling that we’ve been basing our estimates on so far would cost around $1,333 to ensure each year. Bankers, on the other hand, would cost approximately $2,096 for the same type of coverage.

Average Homeowners Insurance Rates in Hawaii Legend: Average Rate Oahu Oahu (Hurricane Insurance) Neighbor Islands Neighbor Islands (Hurricane Insurance) 100 200 300 400 500 600 700 800 900 1000 $946 $595 $839 $1064

 

Based on the table above,You could end up paying around $1,500 a year for a comprehensive homeowners insurance protection on a property on the island of Oahu. On one of the neighbor islands, that yearly premium could be a little over $1,900. But keep in mind, these are averages which were calculated from serving the estimated quotes from over thirty different insurance companies. Depending on which insurance provider you decide to purchase a policy from, your annual premium could be as affordable as $600 a month. On the other hand, if you go with the wrong provider, you can end up paying more than $5,700 for your annual premiums.

Highest & Lowest Property Insurance Rates in Hawaii Legend: Lowest Estimated Rate Highest Estimated Rate Oahu Oahu (Hurricane Insurance) Neighbor Islands Neighbor Islands (Hurricane Insurance) 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 $832 $1249 $524 $785 $738 $1107 $936 $1404

Laws and Requirements

Technically, there isn’t one state within the US that requires homeowners to purchase homeowners insurance either by state or federal law. However, if you are paying for your home with a mortgage, your bank may feel differently. They will likely include a requirement for both basic homeowners insurance and hurricane insurance for anyone buying home within the state of Hawaii. If you fail to purchase the required insurance protection, or if you somehow lose your coverage, you may face legal trouble from your lender.

Taking a Home Inventory

One secret to making sure you get the best possible deal on your homeowners insurance premium is to take the best home Inventory you possibly can. Naturally, this is going to require some rigorous honesty on your part. If you overestimate the value of your property, you may end up purchasing too much coverage. While having more coverage will protect you in the event of an accident, if you never need to file a claim, you could end up wasting thousands or tens of thousands over the life of your policy. However, if you do end up needing to file a claim and you underestimate the value of your property in order to get lower premiums, your homeowners insurance or hurricane insurance policy may not pay out enough to completely repair or replace whatever damage happens to your property. In this instance, you may end up paying a lot of money out of pocket just to get things back to normal.

Choosing What (and How Much) Coverage

The basic HO-3 policy that many Hawaii home insurance companies offer is really only the tip of the iceberg. On top of your basic policy, there are many other factors to consider. Such as:

  • Fires – Most homeowners in Hawaii can rest assured that, whatever happens to your home structure or the property inside, you will be protected in the event of fire damage.
  • Floods –  you may be surprised to learn that even your mandatory separate hurricane insurance policy does not have Provisions for flooding damage. If you are concerned about protecting your property from water-related damage associated with severe weather, such as hurricanes or heavy rain, you will have to contact the National flood insurance program. The NFIP is administered by FEMA and will protect your property up to a certain amount.
  • Damage from Winter Storms – Any type of winter storm damage in Hawaii, whether it be related to snow, hail, or other cold weather, is mostly reserved for higher elevations among Hawaii’s tall mountains and volcanoes. It is highly unlikely that any of these mountainous snowfalls will tumble down and cause damage to the property below.
  • Volcanoes – naturally, a geologically active area such as the Hawaiian Islands should have property owners concerned about damage from lava and other volcanic eruptions. Luckily, on a typical HO-3 policy, damage from volcanoes and lava is not excluded from coverage on the open perils list of damage to your house structure. Likewise, volcanic eruption damage is covered under the named perils of your property coverage.
  • Covering Your Property – Property coverage, which we briefly mentioned in the paragraph about volcanoes, has to do with protecting the belongings that are housed inside your home. On an HO-3 policy, this coverage is limited to the named perils which, if they cause damage to your personal property, your insurance company will pay out a claim on. If your personal belongings so for any sort of damage or need to be replaced because of a disaster that is not on your named perils list, you may be 100% responsible for any Financial loss.
  • Liability Coverage –  If someone gets hurt on your property, or someone else’s property is damaged while it is physically present on your land, you could be held financially liable. This means that a court or an insurance company think that the disaster happened as a result of your negligence. Luckily, liability coverage is a very popular addition to HO-3 policies. Even if you don’t feel that the accident is your fault, you won’t have to pay out of your own pocket (up to your coverage limits) even if illegal or other body demands that you pay up.
  • Umbrella Coverage – Many insurance companies will insure your home, even if it is a large and expensive one. but your average homeowner’s insurance company has its limits. If you live in a million dollar mansion, for example, you may have a difficult time finding a homeowners insurance company willing to issue you a policy with such high coverage limits. However, many insurance companies sell a separate policy – called umbrella coverage – that will provide you with extra coverage limits.

Replacement Cost vs. Actual Cash Value

Replacement cost and actual cash value are two terms that may confuse someone who’s buying homeowners insurance for the very first time. But in reality, they’re pretty simple to understand. Replacement cost is the amount of money your insurance company will pay to repair or replace damage to your structure in the event that you file a claim. Actual cash value, on the other hand, typically applies to your personal property and belongings. so for example, if severe weather destroys your roof, your insurance company will likely pay 100% of the cost for a new roof. But if a large, expensive kitchen appliance gets damaged, and that appliance is 10 years old, your insurance company will only pay to replace your appliance at its original value minus 10 years of depreciation. Your insurance company will most likely not pay to replace your old, damaged appliance with a brand new one.

How Your Credit Score May Influence Your Rate

There are conflicting reports about whether or not Hawaii homeowners insurance companies are allowed to use your credit history when determining your premium. According to some sources, companies in Hawaii are not supposed to use your credit history it all in order to determine how much to charge you each year. Other sources show that some modest decreases and your credit score or blemishes on your credit history may incur a modest 6% rise in premiums.

As you can see in the chart below, a modest 6% increase between someone with excellent credit versus someone with average credit only works out to a few extra dollars per year. However, if you think your premiums reflect some sort of unfair discrimination based on your credit history, then you owe it to yourself to report the incident to your department of insurance as soon as possible. Keep reading to find their contact information below.

Hawaii Homeowners Insurance Rates by Credit Score Legend: Median Credit Homeowner Excellent Credit Homeowner Oahu Oahu (Hurricane Insurance) Neighbor Islands Neighbor Islands (Hurricane Insurance) 100 200 300 400 500 600 700 800 900 1000 $946 $672 $595 $422 $839 $596 $1064 $755

Learn More

For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:

The Hawaii Department of Commerce and Consumer Affairs – Insurance

The Official Hawaii State Government Website

DCCA Hawaii Hurricane Insurance Guide

Or contact them directly through the following resources:

Hawaii Department of Commerce and Consumer Affairs
Insurance Division
P.O. Box 3614
Honolulu, Hawaii 96811
Phone: (808) 586-2790 | Fax: (808) 586-2806
insurance@dcca.hawaii.gov

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