Hawaii homeowners are contending with a wave of rate increases as insurers respond to wildfire exposure, reinsurance costs and economic inflation.
Carriers received approval for at least 20 homeowners' rate hikes last year, with the majority reaching double digits and two approaching 32%.
AM Best director Chris Draghi said property rates are shaped by economic inflation, risk concentration and weather patterns. He noted that the 2023 wildfires, which destroyed more than 2,200 structures, served as "real world examples" that can reset or adjust the insurance industry's view of risk.
Homeowners' multiperil premiums in Hawaii increased 13.38% to $562.2 million in 2024 from $495.9 million a year earlier, according to the state insurance commissioner's 2025 report. Losses, claims and benefits paid dropped from $1.16 billion to $365.2 million over the same period.
State Farm, the state's largest homeowners' writer, was approved for a 28.5% effective rate hike on Nov. 15 for hail, wind and hurricane coverage in its independent Hawaii Homeowners Program through State Farm Fire and Casualty Co. The increase will impact 98,970 policyholders and add $45.5 million in written premium, with a maximum increase of 48.4%.
RLI, the fifth-largest homeowners' writer in Hawaii, increased homeowners' premium 33% in the state during the third quarter, including a 16% rate increase. RLI Insurance Co. was also approved for a 10.7% overall rate increase effective Oct. 1.
The pressure on property owners extends beyond single-family homes. Hawaii lawmakers are considering House Bill 589, carried over from 2025, which would create the Hawaii Condominium Mutual Insurance Co.
The proposed state-backed insurer is scheduled to launch by Jan. 1, 2027, and would provide coverage for condo owners who struggle to obtain policies in the traditional market.
Reinsurance costs have also contributed to pricing pressure. Ocean Harbor Insurance Cos. reported in a rate filing that annual reinsurance rates rose 62.8%. Its subsidiary, Hawaiian Insurance and Guaranty Co. Ltd., began increasing hurricane and all-other peril rates by an overall 31.9% at the start of 2025.
One insurer is exiting the market. MS&AD subsidiary DTRIC Insurance Co. Ltd., a Hawaii-only property and casualty writer, is transitioning to runoff and will stop writing new homeowners' policies in November.
