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|
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.
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.
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.
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.
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:
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.
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.
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:
Or contact them directly through the following resources:
Hawaii Department of Commerce and Consumer Affairs
P.O. Box 3614
Honolulu, Hawaii 96811
Phone: (808) 586-2790 | Fax: (808) 586-2806