Volcano insurance! Is there such a thing?

Volcano insurance! Is there such a thing? | Insurance Business America

Volcano insurance! Is there such a thing?

As the Kilauea volcano in Hawaii continues to spew lava and threaten nearby properties, residents are left to ponder whether their insurance will cover for the damage or not.

Following a series of tremors, Kilauea – active since 1983 – erupted earlier this month. The lava recently spewed by the volcano has destroyed at least 26 homes in the island.

With volcanic and lava damage a very real risk to Hawaiians living near Kilauea, many wonder if their insurance will protect them.

Speaking with CNN, Hawaii Department of Commerce and Consumer Affairs chief deputy insurance commissioner Jerry Bump clarified there is no such thing as volcano insurance or lava flow insurance. He added that because it’s such an irregularity, coverage is not normally available.

"It's not something that would be offered by many insurers," Bump said.

Even the insurers themselves are reminding residents that their policies might not necessarily cover for lava flows and the like.

“As far as earthquake coverage or specifically named like a volcanic eruption, no most people would not have that kind of coverage,” Allstate agent Marc Dixon told Hawaii News Now.

Bump did note that residents that have purchased comprehensive policies that cover all risks will be covered for any lava damage. Purchasing said comprehensive insurance, however, is very difficult for those living too close to areas of high volcanic activity.

"People who live in designated USGS lava zoned areas, trying to get coverage would be difficult. For insurer's perspective, it's what we call anti-selection -- the risk is just too high. The people who are buying [houses there] realize they live in a risk area,” he explained.

 

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