As lava destroys Hawaii homes, owners ask: am I covered?

UNITED STATES.- Patricia Deter moved from Oregon to Hawaii to be closer to her two daughters, but the Kilauea volcano burned down her home only a month after she bought it.

Now Deter and others who have recently lost homes to the lava-spewing mountain are on an urgent quest for answers about insurance, desperate to learn whether their coverage will offer any help after molten rock wiped out most of what they owned.

The eruption has destroyed about two dozen homes in the Leilani Estates subdivision on the Big Island.

Authorities on Tuesday reported a new fissure opened in the adjoining Lanipuna Gardens subdivision, bringing the number of cracks in the ground spitting out lava and toxic gas to nearly 20 since the eruption began May 3. Another fissure that opened up last weekend was sending molten rock crawling toward the ocean at about 20 yards (18 meters) per hour.

Few insurance companies will issue policies for homes in Leilani Estates because it is in an area deemed by the U.S. Geological Survey to have a high risk of lava.

But homeowners are not without options. One possibility is the Hawaii Property Insurance Association, a nonprofit collection of insurance companies created by state lawmakers in 1991 to provide basic property insurance for people who are unable to buy coverage in the private market.

The horror of seeing houses turned to ash has motivated some people who had no insurance to scramble to purchase a policy. The association announced last week that it would issue policies to uninsured homeowners in the affected area — but they will have to wait six months.

Some homeowners believe fire coverage will suffice for homes burned by fire from the lava. And a list of frequently asked questions from the Hawaii Insurance Divi- sion supports that idea, saying that lava damage may be covered “as a fire peril.”

However, there are exceptions. If policies specifically exclude lava damage, the fire coverage will not apply, said Judy Moa, an insurance broker who specializes in catastrophic coverage for Hawaii.

“The cause of damage is lava at the end of the day,” she said. “If lava came down the hill, and they have lava exclusion and trees catch fire, which burn the house, that’s not covered.”

Some homeowners forgo policies that include lava coverage because they can cost more than $3,000 per year, said Moa, who has fielded many calls from anxious homeowners.

The same insurance questions haunt people whose homes are standing but could still be torched by future lava flows.

Todd Corrigan and his wife left their Leilani Estates home on May 4 after a magnitude-6.9 earthquake knocked belongings off their shel- ves. That jolt convinced them it was time to evacuate.