Insurance Bill Evaluation

Hawaii’s 2025 Legislative Session brought forward over 50 “condo related” bills. One of the remaining bills deals with insurance. On March 31, 2025 Governor Josh Green issued his fifth proclamation. the actual directives start on page 3:

🧾 What SB1044 Gets Wrong About Condo Insurance Affordability

SB1044, to be signed into law, was introduced to stabilize Hawaii’s shrinking property insurance market—particularly for condominiums struggling with skyrocketing premiums and non-renewals. But while the bill acknowledges the severity of the problem, it ultimately fails to address the core drivers of unaffordability and may even entrench systemic risk for owners long-term.

Here’s what this new law misses:

1. No Meaningful Relief for Unit Owners

SB1044 expands the authority of the Hawaii Property Insurance Association (HPIA) and Hawaii Hurricane Relief Fund (HHRF), but it does not cap premium increases, establish affordability thresholds, or provide income-based subsidies. Condo associations may now have access to insurance—but at whatever price the market demands.

2. No Self-Insurance Pathway or State-Backed Master Policy

Despite years of testimony from owners calling for self-insurance models or a state-managed master policy similar to those in Florida and California, SB1044 creates no legal pathway for associations to opt out of the failing private market and pool risk through a public or mutual system.

3. Insurer-Favored Financing Structure

Public funds (via bonds and appropriations) are now being used to backstop insurance carriers and pay for startup costs, reinsurance, and operations—without requiring these insurers to open their books, cap profits, or guarantee access to coverage for Hawaii’s most vulnerable buildings. Meanwhile, owners and buyers continue to carry the burden through premium surcharges and recording fees.

4. Short-Term Fixes Without Owner Protections

The law limits coverage through HPIA to five years for high-rise condos, yet places no requirement on insurers or regulators to reduce premiums or improve access in that time. It lacks safeguards such as:

• Transparency on premium-to-payout ratios
• Public review of trust fund expenditures
• Limits on deductibles or special assessments passed to owners

5. Kicks the Can to a Future Study

Rather than solve the problem now, the bill directs the Insurance Commissioner to conduct a study for potential long-term solutions—after insurance costs have already become unaffordable for hundreds of buildings across the islands. That study won’t report back until 2026 or 2027—too late for many owners already on the brink.

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🌊 What We Still Need

If Hawaii wants to keep condo living [not investing] viable and protect local ownership, we must push for:

• A State-supported master policy for qualified associations
• A legal framework for condo cooperatives or mutual self-insurance
• Stronger restrictions on policy surcharges and deductible increases
• Transparency and accountability from any entity using public funds
• Inclusion of owner representatives in all policy-making decisions

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Let’s encourage our lawmakers to focus on solutions that bring real change, moving beyond the fragmented efforts that currently exist. Together, we can build a more resilient and financially secure community.ve complexity and increase the effectiveness of the measures proposed to stabilize the insurance market for condominiums.

You can contact the Committee Charis directly or sign up below for help.

Yamashita, Kyle T. Chair
House District 12 – Hawai‘i State Capitol, Room 306
Phone: 808-586-6200 – Fax: 808-586-6201
repyamashita@capitol.hawaii.gov

Takenouchi, Jenna Vice Chair
House District 27 – Hawai‘i State Capitol, Room 333
Phone: 808-586-9415 – Fax: 808-586-9421
reptakenouchi@capitol.hawaii.gov

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📣 Want to help push for these reforms? Join our growing group of concerned citizens working to demand justice for homeowners—not just protection for the insurance industry.

 Supporting Literature & Evidence:

• “The Risk Pool: How the Insurance Industry Works” by David Moss (Harvard Business School) explains how insurance markets function best when risk is widely distributed and transparently priced. Hawaii’s current condo insurance market fails this test, with concentrated provider control and opaque pricing mechanisms that violate basic risk-pooling principles. Moss warns that when insurers are allowed to cherry-pick clients or regions, the system becomes unstable and unaffordable for those left behind—exactly what Hawaii condo owners are experiencing.
• “The Economics of Insurance Markets” by Karl Borch (Routledge) outlines how monopolistic or oligopolistic insurance markets—like Hawaii’s—lead to price distortions, reduced consumer choice, and systemic inefficiencies. Borch advocates for public alternatives or cooperative models when private markets fail to serve the public good, as is the case here.
• RAND Corporation’s 2023 report on Veterans Affairs Community Care highlights the dangers of outsourcing essential services to private markets without adequate oversight. The report found that while private-sector care was intended to improve access, it often led to higher costs, inconsistent quality, and poor coordination—paralleling the risks of relying solely on private insurers for condo coverage without public accountability.
• Consumer Federation of America (CFA) Reports on Homeowners Insurance have consistently warned that insurers are increasingly using non-transparent algorithms and catastrophe modeling to justify rate hikes, often disconnected from actual claims data or risk exposure. CFA recommends stronger state oversight, public rate justification, and alternative insurance models—none of which are addressed in SB1044.
• “Disaster Insurance Reimagined” by Howard Kunreuther and Erwann Michel-Kerjan (Wharton Risk Center) argues for multi-layered insurance systems that combine public and private resources. Their research shows that state-supported insurance pools and catastrophe bonds can reduce volatility and improve affordability—exactly the kind of reform SB1044 should include but currently lacks.