Storm-related claims swamp insurers
By Deborah Adamson
Advertiser Staff Writer
Gregory Yamamoto • The Honolulu Advertiser
A storm drain blew out above Vic and Jerrie Bajarin's home in Kalihi Valley on Friday, sending a flood of water, mud and debris into their backyard, garage and living room.
Vic Bajarin's toolbox ended up full of mud when flood waters swept through his Kalihi Valley home Friday.
"All you heard was a rumble," said Jerrie Bajarin, setting down a basket of dirty laundry on a mud-stained floor.
"We've never prayed this hard," added Vic Bajarin.
The Bajarins hope that most of the damage will be covered by their homeowners and auto insurance policies, but that might not be the case.
The reason is they don't have flood insurance. Homeowners policies typically would cover water, wind and fire damage as well as theft and vandalism. But it doesn't cover damage caused by floods or hurricanes, unless homeowners take out specific insurance for these two natural events.
So if the wind blew off your roof — providing you weren't negligent in maintaining it — and drenched your living room, insurance would cover the roof and the room.
But if flood damages your home, your homeowner's policy won't cover it, said Mike Onofrietti, vice president and actuary of AIG Hawaii.
These are the types of questions insurers around O'ahu are answering with increasing frequency.
State Farm, Hawai'i's largest auto and homeowners insurer, has received 100 claims over the past three days, said spokeswoman Carolyn Fujioka. Auto claims also spiked, she said, many of them coming from residents of O'ahu's Windward side whose cars got flooded.
Gregory Yamamoto • The Honolulu Advertiser
Over a three-day, rain-drenched period in January, State Farm received more than 1,000 claims, Fujioka said. The insurer had to fly in six Mainland claims adjusters to help with the workload.
A drain pipe burst above homes on Ahuahu Place in Kalihi Valley and sent a torrent of water, mud and debris through the neighborhood.
AIG Hawaii is also seeing a higher than average number of claims being filed, Onofrietti said. In the December and January storms, claims had more than quadrupled compared to normal volume, he said.
While the claims will increase their costs, insurers don't expect that this winter's rains would cause an increase in homeowner rates. That would only happen if there is a long-lasting change in Hawai'i's typical weather pattern, said Linda Gilchrist, president of Island Insurance.
Steve Tabussi, vice president of customer solutions at First Insurance, said rates are determined over a longer period of time and not by the "short burst of activity that we've had over the last six weeks or so."
But State Farm said that if the number and amount of claims stayed high for a sustained period of time, rates eventually could rise.
"Hurricane 'Iniki, these are not," AIG Hawaii's Onofrietti said "On the other hand, it's kind of a change in a pattern. We haven't seen this in a long time."
The state has not released a figure for total damages related to last weekend's storms. Yesterday, Gov. Linda Lingle signed a disaster proclamation, which would make low-interest loans available to affected homeowners and businesses.
Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.
