RELATING TO INSURANCE.

HB885

HOUSE OF REPRESENTATIVES

H.B. NO.

885

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO INSURANCE
.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

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SECTION
1.
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The legislature finds that the
availability of condominium property insurance policies within the State's
condominium insurance marketplace has decreased in recent years, and the cost
of obtaining insurance in this market has increased substantially.
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Recent events, including wildfires in both
Hawaii and California, have threatened to further destabilize this market.

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The
legislature further finds that the California state department of insurance
established the safer from wildfires program in 2022.
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Under this program, property owners who make
certain upgrades to their properties to increase the properties' resilience to
wildfires become eligible for discounts on their property insurance
premiums.
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This program creates a material
incentive for property owners to increase the disaster resiliency of their
homes.

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The
legislature finds that establishing a similar program in Hawaii targeted toward
condominium associations would encourage associations to make improvements that
increase building resiliency.
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This would
result in a decreased likelihood for damage and subsequent insurance claims,
while also providing relief to condominium associations and their residents
from the skyrocketing cost of insurance.

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Accordingly,
the purpose of this Act is to establish a program that requires property
insurers to offer discounts to condominium associations if the associations
make certain upgrades or take specific actions to reduce the association's risk
profile.

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SECTION
2.
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Chapter 431, Hawaii Revised Statutes,
is amended by adding a new part to article 10E to be appropriately designated
and to read as follows:

"
Part
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.
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CONDOMINIUMS; discounts for

risk mitigatioNS PROGRAM

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�431:10E-
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Definitions.
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As used in this part:

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"Association"
has the same meaning as in section 514B-3.

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"Condominium"
has the same meaning as in section 514B-3.

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"Program"
means the discounts for risk mitigations program established by this part.

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"Property
insurer" means any entity providing property insurance in the State under
this chapter.

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�431:10E-
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Risk mitigation upgrades; insurance premiums;
discounts for condominium associations.
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(a)
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There is established the
discounts for risk mitigation program, which shall be administered by the
insurance commissioner as provided in this part.

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(b)
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Under the program, a property insurer that
provides property insurance to an association pursuant to section 514B‑143(a)(1)
shall offer discounts on the association's annual insurance premium if the
association makes certain upgrades to the property being insured or takes other
specific actions to reduce the association's risk profile.
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A property insurer shall provide discounts to
an association that:

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(1)
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Clears vegetation, debris, mulch, and other
combustible materials from the immediate surroundings of the buildings being
insured;

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(2)
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Uses only noncombustible materials in
improvements within five feet of the buildings being insured, including fences
and gates;

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(3)
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Removes combustible structures around the
buildings being insured;

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(4)
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Creates a defensible space between the
buildings being insured and the immediate surroundings;

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(5)
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Installs a fire-resistant roof;

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(6)
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Installs enclosed eaves;

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(7)
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Installs fire-resistant vents;

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(8)
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Installs or requires unit owners to install multipane
windows, including dual pane windows or functional shutters, which, when
closed, cover the entire window and do not have openings;

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(9)
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Installs at least six inches of noncombustible
vertical clearance at the bottom of the exterior surface of the building,
measured from the ground up;

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(10)
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Installs or requires unit owners to install
impact‑resistant windows;

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(11)
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Installs flood barriers and sandbags;

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(12)
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Installs
drainage improvements;

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(13)
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Installs
sprinkler systems;

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(14)
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Installs
seismic improvements;

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(15)
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Implements
a plan for annual structural inspections;

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(16)
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Implements a plan for annual roof maintenance;

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(17)
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Implements a plan for annual sealing and
waterproofing maintenance;

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(18)
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Implements a plan for annual heating,
ventilation, and air conditioning maintenance;

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(19)
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Implements a plan for annual plumbing
maintenance; and

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(20)
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Implements a plan for annual fire and safety
system maintenance; or

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(21)
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Completes any other upgrades or other actions
to reduce the association's risk profile, as specified by the insurance
commissioner in rules adopted pursuant to chapter 91.

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(d)
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The commissioner shall adopt rules
pursuant to chapter 91 necessary to implement this part.
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At a minimum, the rules shall:

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(1)
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Establish the amount of the discount a
property insurer must provide for each of the upgrades or other actions
specified in subsection (c);

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(2)
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Specify any requirements that an association
must meet to qualify for the actions specified in subsection (c); and

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(3)
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Specify other upgrades or other actions for
which a property insurer shall offer a discount, pursuant to subsection
(c)(21), and the amount of the discount."

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SECTION 3.
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If any provision of this Act, or the application
thereof to any person or circumstance, is held invalid, the invalidity does not
affect other provisions or applications of the Act that can be given effect
without the invalid provision or application, and to this end the provisions of
this Act are severable.

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SECTION 4.
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This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.

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SECTION 5.
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This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Insurance
Commissioner; Condominiums; Property Insurance; Discounts; Risk Mitigation
Upgrades

Description:

Establishes a program that requires property insurers to
offer discounts to condominium associations that make certain upgrades or take
other specific actions to increase the building's resilience or reduce the
association's risk profile.
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Requires the
insurance commissioner to adopt rules to implement the program.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.