[§431:21-110]  Application; inspection.  (a)  Any person having an insurable interest in real or tangible personal property who has been unable to obtain basic property insurance from a licensed insurer may apply to the association for coverage.

     (b)  Within ten days of receiving an application, the association may conduct an inspection of the property to determine the condition of the property and decide if the property qualifies for coverage under the standards set forth in the plan of operation.

     (c)  The inspection of the property shall include, but need not be limited to, inspection of pertinent structural and occupancy features as well as the general condition of the building and surrounding structures.  A representative photograph may be taken as part of the inspection.

     (d)  Within ten days of the inspection, an inspection report shall be filed with the member insurer designated by the association.  A copy of the completed inspection report shall be sent to the applicant upon request. [L 1991, c 284, pt of §2]

Case Notes

  District court held that plaintiffs, insured homeowners, had plausibly alleged unfair and deceptive acts or trade practices violations against defendants, surplus lines insurance brokers and underwriters, who knew or should have known plaintiffs needed lava coverage because they lived in a high-risk lava zone.  Defendants acted unfairly by issuing and selling policies that contained lava exclusions, without advising plaintiffs of other coverage available in the market, and failed to perform the requisite diligent search for other insurance available, such as through the Hawaii Property Insurance Association (HPIA).  Plaintiffs argued that they suffered catastrophic losses that would have been covered had they been issued policies without lava exclusions or policies through HPIA.  465 F. Supp. 3d 1088 (2020).

  District court held that plaintiffs, insured homeowners, had pleaded a cognizable claim of bad faith against defendants, surplus lines insurance brokers and underwriters, who knew or should have known plaintiffs needed lava coverage because they lived in a high-risk lava zone.  Underwriters violated common law and statutory good faith obligations stemming from their ongoing contractual relationship by issuing and selling policies that contained lava exclusions, without advising plaintiffs of other coverage available in the market, and failed to perform the requisite diligent search of other insurance available, such as through the Hawaii Property Insurance Association.  465 F. Supp. 3d 1088 (2020).