SB2964 addresses homeowners insurance underinsurance by creating a new disclosure and “insurance to value” framework in Hawaii law. The bill is grounded in findings about the 2023 Maui wildfires and the broader problem that many homeowners do not learn their coverage is too low until after a disaster. It requires homeowners insurance producers to send policyholders a written notice at least once every two years telling them they may submit information about improvements made to the insured property, including the type and cost of those improvements.
The bill also requires insurers to use that information to reevaluate the home’s replacement cost. If the dwelling coverage limit is below the updated replacement cost, the insurer must offer the policyholder the option to buy additional coverage so the dwelling limit matches the replacement cost estimate. The offer must include the premium, remain open for 30 days, and be renewed annually. The measure takes effect on January 1, 2027, and creates a $250 administrative fine for each violation of the new part.
In practical terms, SB2964 amends chapter 431 of the Hawaii Revised Statutes by adding a new part to article 10E governing replacement cost disclosure and insurance-to-value practices. It affects homeowners insurers, insurance producers, and policyholders by imposing a recurring notice obligation, a duty to forward improvement information, and a duty to reevaluate coverage. The bill is aimed at reducing the number of underinsured homes and improving recovery after catastrophic loss, while also potentially increasing premiums for some policyholders who choose higher coverage limits.
The overall sentiment reflected in the bill’s findings and its unanimous committee and conference votes is strongly supportive. The measure appears to have been treated as a consumer-protection and disaster-recovery response to the Maui wildfire experience, with little visible opposition in the available record. The legislative discussion embedded in the bill text emphasizes transparency, homeowner protection, and reducing burdens on nonprofit and government disaster aid systems.
The main point of potential contention is the compliance burden on insurers and producers, who must send notices, process improvement information, reevaluate replacement costs, and maintain annual renewal offers. Another possible issue is cost to policyholders, since the bill may prompt higher premiums when coverage is increased to match replacement cost. However, the available voting history shows no recorded dissent at the committee or conference stages.
Impact
The bill adds a new statutory part to chapter 431, Hawaii Revised Statutes, establishing a homeowners insurance notice-and-reoffer regime tied to replacement cost estimates. It requires biennial written notices, insurer reevaluation of replacement cost when homeowners report improvements, and an offer of additional coverage when the dwelling limit is below replacement cost, with a $250 administrative penalty for violations. The law is intended to reduce underinsurance and improve disaster recovery for homeowners, especially in the wake of the Maui wildfires.
Sentiment
The bill appears to have broad support and little recorded opposition. It passed the Senate Commerce and Consumer Protection Committee 5-0 and both the House and Senate conference votes 3-0 with amendments, suggesting a consensus that the measure addresses a real consumer and disaster-recovery problem. The legislative findings frame the bill as a response to underinsurance and the need for greater transparency in homeowners coverage.
Contention
The most likely areas of concern are operational and financial rather than ideological. Insurers and producers may object to the added administrative duties, the obligation to reevaluate replacement cost based on homeowner-submitted improvement information, and the requirement to keep annual offers open and renewed. Policyholders could also face higher premiums if they elect to increase coverage, though the bill is designed to make that option more visible. No specific opposition is reflected in the available transcripts or vote history.
A resolution to direct the Clerk of the House of Representatives to only present to the Governor enrolled House bills finally passed by both houses of the One Hundred Third Legislature.
Relating to nonsubstantive additions to, revisions of, and corrections in enacted codes, to the nonsubstantive codification or disposition of various laws omitted from enacted codes, and to conforming codifications enacted by the 88th Legislature to other Acts of that legislature.