HONOLULU (KHON2) -- Insurance premiums are skyrocketing for condo owners with no relief in sight. Now the state is taking some action. But will it be enough?
"We are doing everything we can to help stabilize the market," State Insurance Commissioner Gordon Ito said.
He said insurance premiums for homeowners have spiked in large part due to increased costs of repairing and replacing losses linked to natural disasters including the Lahaina wildfires.
Representative Scott Saiki (D), is part of a joint task force put together by the governor to tackle the problem. He said condominiums are being hit particularly hard.
"In some cases you've seen the cost of insurance go from $200,000 a year to over $1 million," Saiki explained.
And condo owners are forced to pay the difference.
"The problem that condo buildings are facing now is that there are only three property insurers doing business in this state and those companies are not insuring buildings at full value and 100% of the building, which is why condo buildings have to go out and piece together layers of insurance coverage to make sure they can fully insure, they can fully cover the buildings," Saiki explained.
He said that's driving up the costs and if buildings aren't fully insured it creates a domino affect.
"Mortgage lenders are not willing to write or issue mortgages on those buildings that are not fully insured," Ito explained. "So that's having a negative ripple effect, not only on the mortgage bankers or the financial institutions, but also with respect to real estate."
Anyone looking to purchase a condo in a building not fully covered, would have to pay cash for it.
On Wednesday, Governor Josh Green signed an emergency proclamation to create more hurricane coverage options for condominiums.
However Ewa resident Jason Lee Hoy said more needs to be done to solve the problem for all home owners.
"It's just, it's terrifying to think what is this going to do to Hawaii in 10-years," Hoy said.
He said the insurance for his town home community jumped from $149,400 last year to over $733,447 this year so he'll have to fork up an extra $4,500 to cover his unit.
"How it would increase by 400% just to cover the roofs and the exterior of the building, it doesn't make sense," Hoy said.
That doesn't even include his HOA fees or the additional insurance he's required to purchase to cover his townhome itself.
Saiki said he understands the frustration and sees the need for change moving forward.
"We're going to have to rethink this whole model of property insurance: How it's provided, how it's paid for, what it covers," Saiki added. "Especially since natural disaster risk doesn't seem to be decreasing."
The state insurance commissioner said homeowners need to review their policies to make sure they are properly insured. One thing he said they noticed after the Lahaina wildfires is that many home owners were underinsured and didn't have enough insurance to cover their losses.