Hawaii, Your Lava Flow Damage Is Covered
The Insurance Information Institute (I.I.I.) recently tackled the somewhat confusing issue of lava flow damage. In most parts of the country, volcanic eruptions aren’t cause for concern, but Hawaii’s geography offers a unique set of circumstances that have now placed many homes, businesses, and cars in the direct line of slow-moving destruction. If you are located in this (or similar) area, I.I.I. has issued a new release sharing the covered and non-covered items that your customers will need to know.
First of all, some good news.
The damages that have been caused by Hawaii’s Big Island lava flow are covered under a homeowners, renters or business insurance policy. Additionally, most standard homeowners, renters and business insurance policies provide coverage for property loss caused by volcanic eruption when it is the result of a volcanic blast, airborne shock waves, ash or dust, the I.I.I. reports, adding that “Fire or explosion resulting from volcanic eruption also is covered. Homes and businesses that have been looted after evacuation, are covered for property damage, vandalism or theft.”
While that should be a relief to Hawaii customers who are having to deal with this threat in real time, ash removal did not fall under the umbrella. “The cost to remove ash from personal property is generally not covered unless the ash first causes direct physical loss to the property,” the company stated in a news release. “There is also no coverage to remove ash from the surrounding land.”
The optional comprehensive portion of an auto insurance policy will typically provide for lava flow-caused damage to vehicles. This also includes direct, “sudden damage to engines from volcanic ash or dust,” the site claims while warning that “damage to homes, businesses or vehicles that occurs over time due to volcanic dust is not covered under most policies.”
Now some bad news.
The Kilauea Volcano on Hawaii’s Big Island spewed forth its destructive lava flow on June 27, taking a brief stop in September before resuming its slow and damaging path. The U.S. Geological Survey estimates that it’s “now moving at a rate of about eight to 11 yards per hour … and several homes may stand in its path.”
According to I.I.I., “Homeowners, renters and business insurance policies do not cover damage from earthquake, land tremors, landslide, mudflow, or other earth movement regardless of whether or not the quake is caused by or causes a volcanic eruption.” In order to get coverage, one would have to add earthquake coverage as an endorsement for an additional charge or by purchasing a separate earthquake policy.
Furthermore, volcanic effusion (i.e. volcanic water and mud) “is not covered under a typical homeowners, renters or business insurance policy.” The I.I.I. does point out, however, that you can get this type of coverage through a flood insurance policy from the National Flood Insurance Program.
One plus for business owners: business interruption insurance could apply if there is direct physical damage to the business that forces the suspension of operations due to an event covered by the typical policy (i.e. volcanic eruption). This will also be in effect if there is physical damage to other property that prevents customers or employees from gaining access to the business, “or if the government shuts down the area, preventing customers or employees from gaining access to the premises,” I.I.I. notes.
It’s our sincere hope the renters as well as the home and business owners caught in the path of the lava flow will have relief before more damage occurs. If you’re an agent in the area and are uncertain about what is covered and what isn’t, feel free to pass along this information to your customers, or even potential insurance leads.