HB1502

SECTION 1. The legislature finds that, according to data collected by Council for Native Hawaiian Advancement, due to the Maui wildfires, the average homeowner payout for coverage was $550,000. The average cost to rebuild a same or similar dwelling at $350 to $450 per square foot will be approximately $600,000 to $850,000. The average deficit will be between $50,000 to $300,000. For some owners the deficit may be much larger. The legislature notes that one policyholder closed on a home for $1,300,000 eight days before the wildfire. This person's dwelling was insured for approximately $300,000. Speaking with policyholders, most relied on their insurance agent to provide them adequate insurance for their properties. The overwhelming majority of policyholders were underinsured and face financial uncertainty about their ability to rebuild.

Accordingly, the purpose of this Act is to establish requirements for property and casualty insurance policies for pre and post disaster protections.

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new part to article 10E to be appropriately designated and to read as follows:

"Part . pre and post disaster protections

§431:10E-A Definition. For purposes of this part, "property and casualty insurer" or "insurer" has the same meaning as in section 431:3-401.

§431:10E-B Notice of cancellation or nonrenewal. For policies of property and casualty insurance, the property and casualty insurer shall give written notice of prospective cancellation or nonrenewal to the insured no fewer than sixty days prior to the effective date of the cancellation or nonrenewal. The notice shall state the reason for the cancellation or nonrenewal. The insurer shall continue all property and casualty insurance coverage in force for sixty days following the mailing. Cancellation or nonrenewal shall not be deemed valid unless evidence of mailing is provided.

§431:10E-C Insurance disclosures on purchase of policy; notifications. (a) The property and casualty insurer shall notify the policyholder regarding the number of claims filed that may result in a cancellation of a policy and shall notify the policyholder if a particular claim may result in cancellation.

(b) An insurer shall notify each policyholder of any important deadlines of the policy sixty days and thirty days before the deadline.

§431:10E-D Grace period; state of emergency. Notwithstanding any grace period specified in an insurance policy, upon the declaration of a state of emergency or local state of emergency pursuant to section 127A-14, each property and casualty insurer shall provide a grace period of sixty days on the payment of policy premiums for policyholders located in the area of the state of emergency or local state of emergency, as applicable.

§431:10E-E Adjustment of premium and policy limits post disaster. When an insurer renews a policy after a total loss due to a disaster, the insurer shall adjust the premium and policy to reflect the actual state of the insured property.

§431:10E-F Additional living expense coverage; option. (a) During a state of emergency or local state of emergency declared pursuant to section 127A-14, each property and casualty insurer shall provide an option of additional living expense coverage for a period of no less than twenty-four months and up to two six-month extensions allowing homes to be restored to safe, sanitary, and habitable conditions.

(b) Property and casualty policies shall provide two weeks coverage for emergency housing in the event of an evacuation, plus any extensions as needed.

§431:10E-G Total loss of content; content coverage. In the event of a total loss of content due to a natural disaster, property and casualty insurers shall not require an itemized list of items lost and shall cover one hundred per cent of the limit of content coverage.

§431:10E-H Close of claim; extension. If a policyholder is unable to rebuild a property within the time specified under the terms of policy, a property and casualty insurer shall pay the full amount of all replacement value of the insured property, including building code upgrades and extended replacement costs, at the time of close out; provided that the property and casualty insurer shall allow no less than thirty-six months' time to close a claim, with two extensions of six months for good cause.

§431:10E-I Relocation. No policy shall limit a policyholder's ability to move to a new location with either an existing home or to build a new home. The policy shall pay the amount of the total loss of the insured property, including the:

(1) Full insured replacement cost without deduction for actual cash value; and

(2) Payment of building code upgrades and extended replacement costs.

There shall be no consideration for land value upon which the replacement home is located."

SECTION 3. Section 431:10-226.5, Hawaii Revised Statutes, is amended to read as follows:

"[[]§431:10-226.5[]] Notice of cancellation or nonrenewal. [In] Except as provided in section 431:10E-B, in the case of cancellation of a policy, the insurer shall give written notice to the insured not fewer than [~~ten~~] sixty days [~~prior to~~] before the effective date of cancellation. For nonrenewal of a policy, the insurer shall give written notice to the insured not fewer than [~~thirty~~] seventy-five days [~~prior to~~] before the effective date of nonrenewal. If under title 24 or a policy, a longer time period is required for a notice of cancellation or nonrenewal for the policy, the longer period shall be applicable. Cancellation or nonrenewal shall not be deemed valid unless evidence of mailing is provided."

SECTION 4. Section 431:10E-124, Hawaii Revised Statutes, is amended to read as follows:

"[[]§431:10E-124[]] Use of inquiries and other information. (a) An insurer shall not refuse to issue, refuse to renew, or cancel a homeowners insurance policy, or establish rates for coverage based in whole or in part on inquiries made by any consumer to an insurer, unless the inquiry provides information not previously disclosed by the insured.

(b) An inquiry by a telephone call or other communication made to an insurer regarding the terms, conditions, or coverage afforded under a homeowners insurance policy that does not result in a claim, including questions concerning whether a policy will cover a loss or the process for filing a claim, shall not constitute a claim."

SECTION 5. Section 657-7, Hawaii Revised Statutes, is amended to read as follows:

"§657-7 Damage to persons or property. (a) Actions for the recovery of compensation for damage or injury to persons or property shall be instituted within two years after the cause of action accrued, and not after, except as provided in section 657-13.

(b) No homeowners insurance policy issued or renewed by a property and casualty insurer shall contain a provision that reduces the time to file an action under this section.

As used in this subsection, "property and casualty insurer" has the same meaning as in section 431:3-401."

SECTION 6. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect upon its approval and shall apply to all policies of property and casualty insurance issued or renewed on or after the effective date of this Act.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1502
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII