The Senate Committee on Commerce, Consumer Protection, and Housing before Chair Ron Menor will hold an information briefing on Tuesday, April 25, 2006 at 5:00 p.m. on Hurricane Insurance. The hearing notice states that the purpose of the informational hearing is to briefing is to provide the public with a comprehensive overview of the issues related to the decision by the state’s largest insurer to discontinue selling hurricane insurance on a large segment of homes in the state, namely:

  • homes with single-wall construction;
  • those built before 1981 that have not been retrofitted with hurricane clips to meet 1993 or 1994 building codes; and
  • homes located within 2,500 feet of the ocean without flood insurance — even if they are not in a flood zone.

As reported in the The Honolulu Star-Bulletin, Zephyr Insurance Co. will not be issuing policies to new customers that fall under one of the three types of dwellings described above. Zephyr stated that recent hurricanes have affected the availability and cost of reinsurance. Reinsurance is the process where an insurance company shares the risk covered by the policy with other insurers.

Update 4/24/2006: Sue Savio, insurance guru has informed me that Zephyr only writes policies for buildings with 4 or fewer residential units. So Zephyr’s decision will not affect larger buildings.