SB1128 amends Hawaii’s insurance code to create new requirements for homeowners insurance policies covering additional living expenses (ALE) when a covered loss occurs. For policies issued or renewed on or after January 1, 2026, insurers must provide policyholders who file an ALE claim with a list of items the insurer believes may be covered, and the list may be based on a template developed by the insurance commissioner. The bill is aimed at improving notice and clarity for insureds about what expenses may be reimbursable after a loss.
The bill also expands and standardizes ALE coverage during declared states of emergency. If a covered loss occurs during a state of emergency, ALE coverage must last at least 24 months from the loss date, with a possible 12-month extension if the insured is acting in good faith but is delayed by shortages of materials or contractors, plus additional six-month extensions for good cause. In other emergency-related situations involving a civil authority order restricting access to the premises, the bill requires at least two weeks of ALE coverage, with additional two-week extensions for good cause. The bill also states that ALE coverage cannot be limited when the home is rendered uninhabitable by a covered peril, while allowing insurers to provide a reasonable alternative remedy instead of direct living expense payments in some cases.
SB1128 would affect homeowners insurance policies and the insurers that issue or renew them in Hawaii, adding new statutory duties under Chapter 431, Article 10E. It also carves out an exception so the ALE rules do not apply to utility public safety power shutoff events intended to reduce wildfire ignition risk. The measure is scheduled to take effect on July 1, 2050, despite applying to policies issued or renewed starting January 1, 2026.
The available legislative history suggests the bill was received favorably in committee, passing the Senate Commerce and Consumer Protection Committee 3-0 with amendments. No committee transcript is provided, so there is no recorded debate to indicate broader opposition or support beyond the unanimous committee vote. The amended version and the long effective date suggest lawmakers were refining the scope and implementation of the insurance requirements rather than rejecting the underlying policy goal.
The main points of contention likely center on the cost and administrative burden for insurers versus the consumer protection benefits for homeowners displaced by disasters. The extended 24- to 36-month ALE coverage period during emergencies may raise concerns about premium impacts, claims handling, and the interaction with other policy limits, while consumer advocates would likely view the bill as strengthening disaster recovery protections and reducing disputes over covered living expenses.
The bill adds a new section to Hawaii Revised Statutes chapter 431, article 10E, governing homeowners insurance claims for additional living expenses. It imposes disclosure obligations on insurers, sets minimum ALE coverage periods during declared emergencies and civil authority restrictions, limits the ability of policies to restrict recovery when a home is uninhabitable, and creates an express exception for utility public safety power shutoff events. These changes directly affect homeowners insurers, policyholders, and the insurance commissioner, who may develop a standardized list of commonly claimed ALE items.
The limited available legislative history indicates generally positive sentiment toward the bill, as reflected by the 3-0 passage in the Senate Commerce and Consumer Protection Committee with amendments. The absence of recorded testimony or transcript means there is no detailed public debate in the provided materials, but the unanimous committee vote suggests the measure was viewed as a constructive consumer-protection and disaster-response bill. The amendments and delayed effective date imply an effort to balance policy goals with implementation concerns.
The likely areas of contention are the length and breadth of required ALE coverage during emergencies, the potential cost to insurers and policyholders, and how the new rules interact with existing policy provisions. Insurers may be concerned about mandatory 24-month coverage, extensions up to 36 months, and additional good-cause extensions, especially in disaster scenarios with supply-chain or contractor shortages. Consumer advocates and homeowners, by contrast, would likely support the bill’s stronger protections, clearer disclosures, and limits on policy restrictions when homes are uninhabitable. The carve-out for public safety power shutoffs also suggests a policy compromise around wildfire-related utility outages.