With homes destroyed and lava spraying into a Hawaiian neighborhood, the concern for many homeowners is: Will the damage be covered?
That really depends on the homeowner’s insurance policy and how the home was damaged.
But there’s no such a thing as volcano insurance or lava flow insurance, said Jerry Bump, chief deputy insurance commissioner at the Hawaii Department of Commerce and Consumer Affairs. It’s such a specialty and so infrequent, that it’s not available, he said.
However, damage could be covered if the homeowner had purchased a policy that covers all risk. But that kind of coverage is rare, hard-to-find and might be very expensive, Bump told CNN. It’s unclear if any of the affected residents on Big Island has that kind of coverage.
“It’s not something that would be offered by many insurers,” he said. “People who live in designated USGS lava zoned areas, trying to get coverage would be difficult. For insurer’s perspective, it’s what we call anti-selection – the risk is just too high. The people who are buying [houses there] realize they live in a risk area.”
Most people may have a general homeowners policy. If their homes are damaged by lava that causes fire, that may be covered as a fire peril under their policy.
But every carrier’s policy might be worded differently and might have specific exclusions. It’s best to check with local insurance agents, Bump advised.
And such policies generally don’t cover earthquake damage. There have been hundreds of earthquakes in the past week, including a 6.9-magnitude one on Friday.
Most people in the area don’t have policies with earthquake coverage, insurance agent Marc Dixon told CNN affiliate KITV.
What to do if you’re affected
So far, about 1,700 people have had to flee their homes and many don’t know if they’re still standing.
Steve Gebbie is one of them. He was forced from his home on Leilani Estates after the Kilauea volcano erupted Thursday.
Like tributaries, the cracks ripped through streets near Steve Gebbie’s home. Later, steam rose from the widening fissures before orange columns of molten rock erupted geyser-like into the tropical air.
“People in Hawaii – the Big Island – have to deal with the lava…” said Gebbie, who has lived there for 12 years. “I knew that when I moved here. This was a gamble that everybody takes. I just, maybe have lost.”
“I’d have to start over at age 56. That’s concerning. I was five years away from retirement, with a house paid for. And retirement is nowhere near in the future now,” he told CNN.
For people who don’t have insurance, the Hawaii Insurance Division advises removing belongings from their homes and making plans for where to stay.
For people with homeowners insurance, it recommends keeping the policy in a safe place, documenting belongings with pictures or videos and removing as much from their homes as possible, because lava flow could cut off their access.
CNN’s Ray Sanchez and Stephanie Elam contributed to this report.