Hawaii Flood Insruance
Hawaii Flood Insurance

Hawaii Flood Insurance

Aloha Hawaii, with your beautiful tropical weather and sunny day it can give us a false sense of security when it comes to understanding and evaluating the risk of flooding. Hawaii flood insurance is a must with bouts of heavy rain, flash floods as well as ocean surges due to high surf. 25% of flood insurance claims occur in low to moderate risk flood areas, any home can still be in danger of damage from the surging water, mudflow, wave action or tsunami. We will shop all Hawaii flood insurance, Hawaii flood insurance rate map, Hawaii flood insurance cost, and the Hawaii national flood insurance program. We will also share some statistics and links if you really want to get into understanding the risk of flooding in Hawaii. This page is our attempt to pull together all the information so you can get a clear cost of flood insurance in Hawaii. We are your one-stop-shop to all your Flood insurance needs. Your flood nerd. Maholo.
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Does my Hawaii homeowners insurance cover flooding?
Do I need flood insurance in Hawaii?
What are my flood insurance options in Hawaii?
National Flood Insurance Program Hawaii
Hawaii private flood insurance market
How much does flood insurance cost in Hawaii?
4 things you need to know about flood insurance in Hawaii Islands?
Hawaii Flood Insurance calculator
Cost of flood insurance in Hawaii?


Does my Hawaii homeowner insurance cover flooding?

A typical Hawaii homeowners’ policy is written through Farmers, State Farm, Allstate, and Progressive, for instance, excludes flooding as something that will be covered under their homeowner’s policy.

In most cases, the only way to get flood coverage is by purchasing a stand-alone flood insurance policy. However, you should ask your homeowners agent if you can add an endorsement to your homeowner’s policy to cover flooding.

Yet, don’t be too surprised if the answer is NO.

Do I need flood insurance in Hawaii?

It is important to have flood insurance coverage in Hawaii because our beloved Aloha State has seen a fair share of flooding, and there is likely more coming.

We believe that most homeowners think about Flood insurance in Hawaii at some point, maybe before buying a home, or during the closing process.  However, many of us only think about it when a big storm is looming, or we have heard on the news that there is flooding forecasted or happening currently too close to our home.

If your home or business is in a flood zone, that is considered low flood risk area. Sadly, many homeowners decide to forgo purchasing coverage because they believe they are safe from flooding. Some real estate agents and some insurance agents may even say you don’t need it.

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I ask you to consider the facts: 20-percent of all flooding events across our nation come in areas that are considered low risk. After our last few major storms (Hurricane Harvey), we saw flooding in these low-risk areas.  In 80 percent of these individuals, they had water in their homes or buildings and didn’t have flood insurance coverage.

FEMA or National flood insurance program Hawaii

We hear often that people believe that the government will help, and this is true.  However, there are a few things that must align for you to get government assistance.

1 – The president of the United States must declare the flooding event a state of emergency.  If this doesn’t happen, then there won’t be assistance.
2 – The average amount of assistance that homeowners get after a flood when they do not have flood coverage, is $5,000.  The average cost of damage to one’s property after a flood is $38,000+.  That $5K you get from the government?  It comes in the form of a loan and you will need to pay it back.  Are you willing to gamble away your financial future by forgoing flood insurance coverage?
https://www.bloomberg.com/graphics/2017-fema-faulty-flood-maps/
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Hawaii Flood Insurance Rate Maps

One more note on these low-risk flood zone maps. Many of these maps are over 40-years old. If the area has been developed, then there is likely more concrete, creating a barrier for land that previously, might have absorbed the massive downpour.

Because of all these factors, it is difficult for property owners to know their true risk of flooding. FEMA admits that their flood maps only give an idea for part of the risk. Our recent storms are facts that it can rain anywhere within Hawaii, and you should consider getting flood coverage, so you are not uninsured when you need it most.

FEMA flood zone maps often take years to go into effect after the terrain was studied, this gives the impression that the area is “more up to date” then it really is.

The average cost for Hawaii flood insurance in these Low-risk areas is $595 per year.

FEMA’s National Flood Insurance Program (NFIP) and all federally backed lenders rely on these Hawaii flood insurance maps to assess risk, set premiums, and determine who is required to purchase flood insurance. Bad information about an area’s flood risk can leave property owners under or uninsured.

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How much is flood insurance in Hawaii?

Flood insurance rate maps Hawaii

There are many options available in Hawaii regarding flood insurance, but they basically fall into two main categories.

1 – The National Flood Insurance Program (NFIP), also known as FEMA, which is the government option for flood insurance.  The NFIP has enjoyed a 50-state monopoly on the flood insurance market.

2 – Not “private flood insurance” but NFIP Resellers

If you have Nationwide Flood Insurance, State Farm Flood Insurance, Progressive Flood Insurance, or any of the of the logos below then you are buying the NFIP flood policy that is just being resold through a government program. These companies are private companies, but their flood insurance is not. Here is a list of the 70 companies that resell the NFIP policy.

Progressive Flood Insurance

https://www.fema.gov/wyo_company
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Hawaii private flood insurance market

 

Llloyds of London Flood Insurance ShopperThere are alternatives to the NFIP or government insurance.  It  is called Private flood insurance most notably Lloyds of London Flood insurance, however, there are other options available in Hawaii. We shop all the options for your property in your region to ensure you are getting the best premium.  If you are ready to have us do the work for you, please click here.

Our shopping does include the NFIP because sometimes we find that with government subsidies you can get a much better premium.

https://www.betterflood.com/quote/

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Lloyds of London Flood Insurance Hawaii Market

 

Hawaii is fortunate to have many Lloyds of London flood insurance options. Although many Lloyds flood insurance companies will have you assume that there is only one option, nothing could be further from the truth.

Lloyds of London has a rich history and is attributed to have invented the very first modern insurance model. Unlike most of its competition, Lloyds of London is not really a company but rather a corporate body.  This structure works quite well since it has been around for over 330 years. Lloyds operates under multiple financial backers that all pool their capital to spread the risk.

I have two blog posts that take a deep dive into Lloyds of London and what they mean to Hawaii’s flood insurance market.  If you are interested, the links are below.

Lloyds of London Flood Insurance

NFIP vs Private flood insurance market

Lloyds also insures the world for flood insurance, meaning they cover flooding events in India, Australia as well as much of Europe.  You see the “game” of insurance is to spread your risk since Lloyds is worldwide.

Lloyds of London Private Market Flood InsruanceMy joke here is that Lloyds is banking on Gods promise that he won’t flood the entire world again, …..so they won’t have to pay out the whole worlds flood claim.

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How much does flood insurance cost in Hawaii?

There are many factors that go into getting the cost of flood insurance for Hawaii. If your home is in what is considered low-to-moderate risk, you can get a heavily subsidized policy though the government.

Hawaii flood insurance low-to Moderate Risk rate and cost.

This is Flood Zone X, which is not lender required flood zone.

This is usually identified as an X-flood zone.  Then we would suggest the government Preferred Risk Policy (PRP) which is a subsidized policy and has set flood insurance coverage limits (see grid below):

$250K (Residental) /$500K (commercial) Building
NFIP Maximum Coverage Limits

Here a link if you want to really dig into this one. Be ready for an eye chart because every option is public record and should be standardized accost whoever writes these policies.

The average cost for flood insurance in Hawaii with the maximum set limits in these Low-risk flood zone areas is $405 – $700 per year.

A flood zone and SHFA rate maps
FEMA High-risk Rates
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https://www.fema.gov/media-library-data/1523307331106-4cf9726b2eb04c3471a3e9d37a58fa6a/09_prp_508_apr2018.pdf

If your property is in higher-risk flood zone, it is usually identified with a Flood Zone AE. Your lender will require you to have flood insurance. The cost of flood insurance in Hawaii depends on many factors that are unique to the structure. We are going to try to give you an idea for the most common homes we see in Hawaii with a slab on grade foundation.

We will look at the Hawaii cost of flood insurance for the NFIP maximum of $250,000 for the (building only) with NO CONTENTS and our recommended deductible of $5,000.

We will be rating this example on the NFIP, as well as on a few of our private flood insurance policies, specifically Lloyds flood insurance options in Hawaii.

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Cost of Flood Insurance in HAWAII in high-risk flood zone AE

Our example is in Kihei, Maui County, but the premiums will be the same if in Honolulu County, Hawaii County, Kauai County and many other Hawaii flood zones.

In our example, the Base Flood Elevation (BFE is 20) and is a home that is built before 1963

SHFA

NFIP option in Hawaii Flood Zone AE

NFIP – Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

NFIP Annual premium in High-Risk flood zone is $1,159.00

This option is what we see if the property has had a flood loss before, and either doesn’t have an Elevation Certificate applied or the Elevation certificate showing that the lowest floor is 4 feet under the BFE for the area. You can use 10% of your coverage to cover other structures on your property

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Hawaii Private flood insurance – Lloyds of London Flood Insurance (option 1)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Lloyds of London (option 1) Annual premium in High-Risk flood zone is $865

Lords of London Flood Insurance policy
Lloyds of London Flood Insurance Jumpping in

This option is great, and we are very happy when we can get this option. They can be a bit choosey about what risk they will accept and will not take anything that has had a flood loss. They do offer coverage for basements, about $2,000 for loss of use, $2,000 for other structures, but they can’t increase this coverage. They do not require an Elevation Certificate to rate.

Hawaii Private flood insurance – Lloyds of London Flood Insurance (option 2)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Lloyds of London (option 2)  Annual premium in High-Risk flood zone is $750

This option is great, and we are very happy when we can get this option for our clients as well. They seem to be writing almost all risks; however, they do not write any property that is in a designated floodway or has the depth of -4 under the BFE.  In our example, with our BFE being 5368, if the lowest floor is 5364, then they will not accept this risk.  They will not take anything that has had a flood loss. They do offer limited coverage for basements and do not require an Elevation Certificate to rate, and as a percentage of coverage for loss of use. If you want coverage for other structures, then that will need to be added.

 

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Private Flood insurance option (option 3)

Coverage of $250,000 building coverage (no Contents coverage) and $5,000 deductible

Private flood insurance (option 3) Not Lloyds,

Annual premium in High-Risk flood zone is $2,241.94

This option will take properties that have had one flood loss as long as it has been more than five years, and the payout was under $100,000 on the claim. Their coverage matches the NFIP.  They will write practically all risks, don’t need an elevation certificate to rate, and are a bit lower in premium than the NFIP.

Private Flood insurance –  Lloyds of London (option 4)

This option must be written on the Replacement Cost Value (RCV) of the building, otherwise, there is a co-insurance penalty that kicks in. So, $250,000 might be a bit low in Hawaii, but to keep this going, let’s just use that for this option

Coverage of $250,000 (RCV) building coverage, No Contents and $5,000 deductible

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Annual premium in High-Risk flood zone is $4,094.10.

This options rating system is all over the board.  Sometimes we get a crazy great price, but other times the premium is way higher than the NFIP will consider taking a property that has had one flood loss before as long as it has been more than ten years and the payout was under $50,000 on the claim. Their preferred coverage is at replacement cost, which is a bit different from some of our other Lloyd’s flood options.  We usually reserve this one if the property doesn’t fit into any of our options above. We can adjust coverages to control premium. As mentioned before, this underwriters’ rates are all over the board.  It is worth shopping through to make sure we are getting you the best premium we can. They don’t need an elevation certificate to rate.

Private Flood insurance –  Lloyds of London (option 5)

Coverage of $250,000 (RCV) building coverage. No Contents and $5,000 deductible.

Annual premium in High-Risk flood zone is $970.94

This options rating system is also all over the board. Sometimes we get a crazy low price; other times the premium is way higher than the NFIP. They will consider taking a property that has had one flood loss before as long as it has been more than ten years and the payout was under $25,000 on the claim. They have been rumored to give a low price the first year and then non renew following years or sometimes they jack the price way up so we will watch them. They have a slick system, and their underwriting is managed by a 3rd party, which also seems to be a glitch sometimes.

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There are more options coming online every day, and we are working to be looking into every viable option.

Currently, Hawaii has 60,625 NFIP policies in force to date with the total cost of $40,778,877. That would make the average for Hawaii $673. Of course, some will pay more, and some will pay less.

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Flood Insurance on the Big Island

Aloha, Hawaiʻi County!  Your policies in effect total 4,438!  The premiums for these policies are $3,471,464.  The average rate for Hawaii County, Hawaii, comes in at $782!

Flood Insurance on O’ahu

The number one city in Hawaii for policies and premiums is Honolulu!  Honolulu is the state capital of Hawaii and Hawaii’s largest city!  The average flood rate for Honolulu, Hawaii is $655.  This includes 38,524 policies at the total premium of $25,255,187.  Thanks for visiting our page Honolulu!

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Flood Insurance on Kauai

Next up is Kauai, Hawaii.  The written premium in Kauai adds up to $4,510,846.  The total number of policies is 5,260.  This indicates an average flood rate for Kauai, Hawaii of $858.

Flood Insurance on Maui

Finally, we look at Maui, Hawaii.  The total number of policies in Maui is the second highest in the state, coming in at 12,402.  The written premium totals up to $7,540,543.  Maui’s average flood rate is $608.

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For decades, the NFIP has over-charged 50 percent of its policyholders and under-charged the other 50 percent, while it has racked up $42 billion in taxpayer-funded losses, equating to more than half of every claim paid by the NFIP since 1978.

About 30 percent of NFIP claims payments go to the same 3 percent of insured “repetitive loss” structures year after year. When you do the math, this means that the other 97 percent of their flood-exposed constituents could have paid in less and still netted larger claims payouts if they had better access to private flood insurance. In fact, a recent white paper by Milliman found that 90 percent of homes in Sandy-struck New York and New Jersey would see reduced flood insurance rates through private insurers.

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Flood Nerd Private Flood Insurance

ROBERT MURPHY
Robert Murphy is the Founder of Better Flood Insurance a nationwide Flood Insurance Agency. He is a flood nerd, is passionate about education around the need for Flood Insurance.
We shop all options to make sure we are getting our clients the best coverage at the best price.




References

the following documents contain additional hydrologic data, flood photos, historic flood descriptions, floodplain delineations and other pertinent information, and should be considered supplemental to this flood warning plan:
https://bsa.nfipstat.fema.gov/reports/1011.htm#COT
https://www.fema.gov/average-claim-payments-date-loss
https://www.fema.gov/national-flood-insurance-program
https://www.fema.gov/media-library-data/1486576697135-ac6348fb2a3d98ceba33cf3f38422dbc/Claim_Loss_Counts_Sept2016.pdf
https://www.fema.gov/media-library-data/1458666638945-d752cb148ef1348b4b1c22acec66a0bd/Claim_loss_count2015.pdf
https://www.fema.gov/media-library-data/1393877884619-3091f75bf9d46a26f5beb7d423c34529/Total_Claim_Count_fy2013.pdf
http://gis.hawaiinfip.org/FHAT/
http://geoportal.hawaii.gov/datasets/8f0c55dee33f4eb5815dc2b191e684f6_5?geometry=-158.457%2C21.371%2C-157.471%2C21.595