RELATING TO INSURANCE.

SB2963

THE SENATE

S.B. NO.

2963

THIRTY-THIRD LEGISLATURE, 2026

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 a single wildfire, hurricane, tsunami, volcanic
eruption, or other catastrophic disaster can destroy every article of clothing,
furniture, appliances, and irreplaceable personal items in a household.

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The legislature further finds that
requiring disaster survivors to list and document every lost item places an
unreasonable burden on these victims, who are already traumatized by the loss
of their homes and communities.
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Disaster
survivors often lack receipts, photographs, or other records needed to meet the
detailed inventory documentation required by insurance companies.
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Requiring the preparation of these
inventories is a major administrative hurdle that may affect the access to
funds needed for basic necessities.
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Forcing
disaster survivors to create these lists also prolongs emotional trauma and
diverts their attention from the process of rebuilding or replacing their home.

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The legislature finds that California, Colorado,
and Oregon have enacted reforms that protect consumers by requiring insurance
companies to pay a percentage of the insured value of personal property covered
under an insurance policy, without an inventory.
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These state laws still require the
preparation of an itemized personal property inventory to obtain the full
insured value under the insurance policy.

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The legislature finds that the reforms
enacted by California, Colorado, and Oregon relieve survivors of the necessity
of preparing an inventory and do not create any additional cost or liability
for insurers.
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Total payouts remain
capped at the coverage amount previously agreed to by the insurer and
policyholder.
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Specifically, insurers
still set the coverage limits and calculate premiums based on these amounts,
which means the risk has already been priced into the policy.
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An insurer who must pay the full value of
property destroyed under an insurance policy is simply fulfilling their
contractual obligation under the policy as written.

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The legislature further finds that ensuring
prompt, full payment of contents coverage after a catastrophic loss speeds up
disaster recovery, helps prevent administrative disputes between insurers and
insured persons, allows families recovering from disasters to focus on survival
and rebuilding instead of filling out unnecessary paperwork, and supports
Hawaii's broader economic and social resilience.

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The legislature therefore declares that
requiring the automatic payment of one hundred per cent of the insured value of
insured personal property following a catastrophic disaster is both fair and
necessary to protect consumers and ensure the timely and efficient recovery of
affected communities.

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Accordingly, the purpose of this Act is to:

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(1)
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Require
the automatic payment of one hundred per cent of the personal property or
contents coverage limit stated in an insurance policy if a total loss of a
dwelling is caused by certain perils that occurred during a state of emergency;

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(2)
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Prohibit
an insurer from requiring the submission of an itemized inventory of damaged or
destroyed personal property; and

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(3)
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Require
notice to policyholders of the right to an automatic payment.

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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 be appropriately designated and to read as follows:

"
PART
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.
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HOMEOWNERS INSURANCE; RENTERS INSURANCE; PERSONAL PROPERTY

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�431:10E-
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Definitions.
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As used in this part, unless the context
otherwise requires:

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"Contents coverage or personal
property coverage" means the portion of a homeowners or renters insurance
policy that covers personal belongings such as furniture, clothing, appliances,
electronics, and household goods.

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"State of emergency" means a
state of emergency or local state of emergency declared by the governor or a
mayor pursuant to section 127A-14.

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"Total loss" means that the
dwelling and its contents have been destroyed to the extent that no significant
personal property remains salvageable.

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�431:10E-
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Payment of contents coverage after
catastrophic disaster loss.
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(a)
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If a total loss of a dwelling insured under a
homeowners insurance policy or renters insurance policy is caused by a peril that:

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(1)
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Is
covered under the homeowners or renters insurance policy; and

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(2)
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Occurred
during a state of emergency,

an insurer
shall pay one hundred per cent of the contents coverage or personal property
coverage limit stated in the policy.
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An
insurer shall not require the submission of an itemized inventory of damaged or
destroyed personal property as a prerequisite for the payment required under
this section.

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(b)
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The
payment required by this section shall be made within sixty days from the date
the total loss is established.

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�431:10E-
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Notice to policyholders.
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No later than thirty days after the
declaration of a state of emergency that affects an insured property, an
insurer shall provide clear written notice to all policyholders of the right to
an automatic payment of one hundred per cent of contents coverage or personal
property coverage after a total loss pursuant to this part and the process to
apply to receive this automatic payment."

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SECTION 3.
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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 4.
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This Act shall take effect on January 1, 2027, and shall apply to all
homeowners insurance policies issued or renewed on or after that date.

INTRODUCED BY:

_____________________________

Report Title:

Insurance;
Contents Coverage; Personal Property Coverage; Automatic Payment; State of
Emergency; Notice to Policyholders

Description:

Requires
the automatic payment of 100% of the personal property or contents coverage
limit stated in an insurance policy in the event of a total loss of a dwelling
caused by certain perils that occurred pursuant to a state of emergency.
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Prohibits an insurer from requiring the
submission of an itemized inventory of damaged or destroyed personal
property.
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Requires notice to
policyholders of the right to an automatic payment.

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