Hawaii Property Study Guide

Hawaii’s property market is shaped by perils no mainland syllabus covers properly: hurricane across an open ocean, lava, and tsunami. It is also shaped by two separate residual mechanisms rather than one — and by a hurricane fund that nearly every study guide still describes as dormant, and which came back to life in 2024.

Hurricane coverage is usually a separate policy

Start here, because it reverses a mainland assumption. On the mainland, wind is inside the homeowners policy and the question is what the hurricane deductible looks like. In Hawaii, hurricane coverage is customarily a separate policy altogether.

The Insurance Division tells consumers plainly that a standard homeowners policy “will not protect you from a flood, a hurricane, or an earthquake loss,” and that “your mortgage lender may require you to purchase a separate flood or hurricane policy.” A homeowner who assumes their HO policy handles hurricane damage has a common and expensive misunderstanding — and that scenario is exam material.

The Hurricane Relief Fund is active again

HRS chapter 431P created the Hawaii Hurricane Relief Fund (HHRF) in 1993, after Hurricane Iniki emptied the private market. It stopped writing when that market recovered in the early 2000s, and it has been described as dormant ever since — in nearly every guide you will read.

It was reactivated in 2024, in response to renewed property-insurance instability. What it writes now is narrow and specific:

• Hurricane-only excess commercial property cover for condominium and townhouse Associations of Apartment Owners (AOAOs) — the insured keeps separate primary cover for other perils
• A fixed 2% per-building deductible
• A maximum limit of $140 million
• Eligibility requiring total insured value above $10 million and prior denial by at least two Hawaii-licensed insurers, over an underlying hurricane master policy of at least $10 million
• A one-year term with no automatic renewal — annual reapplication is required

And the detail that makes this a producer question rather than a market-history footnote: HHRF policies “can only be purchased through a Hawaii licensed insurance producer.”

Two residual mechanisms, not one

Do not confuse the hurricane fund with the FAIR plan; Hawaii has both, and they interlock by design.

The Hawaii Property Insurance Association (HPIA) is the FAIR plan, established under HRS § 431:21-101 to “assure the availability of basic property insurance” and to “provide for the equitable distribution among member insurers of the responsibility for insuring qualified property for which basic property insurance cannot be obtained through the authorized insurers.” Its statute cross-references chapter 431P, confirming the two are meant to work together.

So: HPIA for basic property insurance that the admitted market will not write; HHRF for hurricane cover in a stressed market, currently for AOAOs.

Lava is a real underwriting peril

Hawaii’s catastrophe exposure is hurricane first — but volcanic eruption and lava flow are genuine, current perils, with County of Hawaii lava-zone rules governing where and how property is written. Hawaii statute even provides for a lava-zone waiting period following an emergency proclamation. Flood and tsunami round out the list. No other state’s property exam asks about lava.

Rate regulation — file, wait, and be deemed approved

Hawaii is not a prior-approval state, and it is not plain file-and-use either. HRS § 431:14-104 runs a file-and-wait system with a deemer: each filing “shall be on file for a waiting period of thirty days before the filing becomes effective,” and “a filing shall be deemed to meet the requirements of this article unless disapproved by the commissioner” within that period.

The Commissioner may extend the wait by up to 15 additional days, or allow earlier effectiveness on written application. Certain inland marine ratings, statutorily required surety bonds, and individual risk modifications take effect immediately.

Rates must not be excessive, inadequate or unfairly discriminatory — the three-part standard the exam expects verbatim.

Surplus lines — both lines first, then diligent effort

A Hawaii Surplus Lines Broker must already hold an active resident producer licence carrying property and casualty lines of authority — both, not one. And HRS § 431:8-301 conditions a placement on a diligent effort to place the risk in the admitted market first.

The consequence worth carrying: a surplus lines insurer is not admitted, so its policyholders have no guaranty association protection — the same gap the HHRF’s § 431P-15 exemption creates from a different direction.