By Kai Ioh | July 2025
Not Our First Rodeo: An Ongoing Crisis
If you’ve followed my updates—starting in August 2024 and again in early 2025—you know Hawaii’s condo insurance crisis didn’t arrive overnight. Since last summer, we’ve watched insurance companies pull out, premiums double or triple, and AOAO fees and special assessments soar—just to keep basic coverage in place.
Now, a year later, the situation still ripples outward. Condo insurance may grab the headlines, but single-family homeowners are feeling it too: more scrutiny on roofs and systems, and, in some cases, outright policy non-renewals. This isn’t just a “condo issue.” It’s shaping our entire real estate market and touches every buyer, seller, and community on the island.
What Changed? The Reality of Senate Bill 1044 (Act 296)
On July 8, 2025, Governor Josh Green signed Senate Bill 1044—now Act 296—into law. This act directly targets Hawaii’s insurance market instability, especially the crisis in hurricane coverage for condos.
Why Did the State Step In?
Over the past two years, Hawaii’s insurance market was pushed to a breaking point by national and local disasters. Many associations simply couldn’t find hurricane insurance at any price. Some saw premiums jump by 500% or more, leading to special assessments or fee increases that threatened affordability for residents—especially seniors and those with mortgages.
What Does Act 296 Actually Do?
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Reactivates the Hawaii Hurricane Relief Fund (HHRF):
Dormant since the 1990s, the HHRF is now back. Its purpose is to offer hurricane insurance to condo and townhouse associations (AOAOs) only if they’ve been denied coverage by at least two private insurers. -
Expands the Hawaii Property Insurance Association (HPIA):
Gives HPIA more tools to provide basic coverage when the private market fails. -
Creates the Condominium Loan Program:
This new initiative will help associations fund essential repairs, which in turn may make insurance more accessible and affordable. -
Mandates a Comprehensive Study:
The Insurance Commissioner must now seek long-term solutions to stabilize the insurance market statewide.
What Type of Coverage Is Offered?
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The HHRF now provides hurricane insurance for AOAOs, but only as excess coverage for losses above $10 million.
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AOAOs must still secure “primary” hurricane insurance up to the first $10 million from private insurers.
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All applications go through a licensed insurance producer.
Who Is Eligible?
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AOAOs denied hurricane coverage by at least two state-licensed insurers
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Buildings with a total insured value over $10 million
Early Results?
Some associations, even mid-sized—not just luxury towers—have reported up to 70% savings on their hurricane insurance through HHRF. Applications are being accepted now, and more info is available at hhrf.hawaii.gov.
The Catch: Not a Silver Bullet
Let’s be clear:
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This law does not automatically lower insurance for everyone.
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Smaller or older condo buildings, or those able to find private coverage, may not benefit at all.
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Primary insurance (first $10M) must still come from the open market—where rates remain high and options are limited.
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The law is aimed at average condo buildings, not luxury high-rises.
But: It does create a vital safety net, prevents buildings from becoming completely uninsurable, and puts downward pressure on premiums through new competition.
How Is This Hitting Real Owners and Buyers?
Special assessments & AOAO fee hikes:
Owners continue to face increased fees as associations scramble to pay much higher premiums—or bridge gaps when coverage isn’t available.
Insurance company pullouts:
Some entire condo projects have been dropped. Boards must act fast to secure new coverage, sometimes at a much higher cost and with stricter terms.
Single-family homes not immune:
This year, I’ve seen single-family clients denied renewal simply due to older roofs or outdated systems. Insurers are asking more questions, inspecting more often, and tightening their criteria.
Who Benefits Most—and What Are the Next Steps?
Who Can Apply for HHRF Coverage?
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AOAO must be denied hurricane insurance by at least two state-licensed insurers.
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The building’s insured value must exceed $10 million.
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HHRF coverage is hurricane insurance only and covers excess losses (above $10 million). You need to buy primary coverage separately.
How to Apply
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Associations must apply through a licensed insurance producer (agent/broker).
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Info and forms: hhrf.hawaii.gov
Will It Solve Everything?
No. This is a crucial new tool and a real relief for some, but it’s not a cure-all.
Hawaii’s unique risks and the global reinsurance crunch mean volatility may continue. Associations—and owners—must stay proactive, fund reserves, and keep up with essential repairs.
Practical Advice for Owners, Buyers, and Sellers (2025)
If you own a condo:
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Ask your AOAO if they’re exploring HHRF or the new loan program.
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Plan for possible fee increases and don’t be afraid to ask hard questions at board meetings.
If you own a home:
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Stay ahead of maintenance, especially roofs, plumbing, and electrical.
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Get insurance quotes well in advance and communicate openly with your agent.
If you’re buying or selling:
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Double-check current insurance status before escrow.
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When in escrow, review condo association documents thoroughly. Make sure your agent gives you enough review time under M1 contingency.
Big Island Perspective: Stay Steady, Stay Informed
Since last year, Emil and I have been helped both condo and home clients navigate this uncertainty. What keeps our market resilient is open communication, quick action, and creative problem-solving—no matter your situation.
Act 296 (SB1044) is a step forward, and the HHRF is now a real option for many AOAOs under pressure. But Hawaii’s insurance landscape remains unpredictable.
If you have questions about your building, your coverage, or your strategy for buying or selling in 2025, let’s talk. Whether you’re a longtime client or just starting your Hawaii journey, I’m here to help you navigate this evolving market.
Let’s stay informed—and let’s stay connected.
Kai Ioh (井尾大介 / イオ ダイスケ) | Compass Hawaii | July 2025