The Hawaiian Islands are a lush tropical paradise with palm trees, beaches, and breathtaking active volcanoes. Their very makeup intrigues many, but it is also the source of potential catastrophe. The Island of Hawai’i, commonly referred to as the Big Island, is home to five volcanoes, including Mt. Kilauea.
Kilauea is one of the world’s most active volcanoes which has been erupting on and off over the last several thousands of years.1 Kilauea’s current eruption has made headlines over the past few months, but this eruption is actually part of the ongoing eruption which began in 1983.2
When many people think of volcanoes they think of steep, explosive strato volcanoes like Mt. St. Helens in Oregon or Mt. Pinatubo in the Philippines—both of which have had some of the most destructive eruptions in recent history.3 In contrast, the Hawaiian volcanoes are a different variety known as shield volcanoes which are characterized by their gentle sloping sides and broad domes. The eruptions are also very different in the Hawaiian shield volcanoes, where the lava is very fluid and basaltic as opposed to pyroclastic.4
On May 17, 2018, Kilauea experienced an explosive eruption. This type of eruption, while not entirely unexpected, is uncommon with these types of volcanoes. The flowing lava came in contact with the water table, which in turn generated the explosive eruption, sending ash plumes into the air and impacting air quality.5
Even though catastrophic eruptions are not common with Mt. Kilauea, the nature of the flowy basaltic lava does pose a great risk to homes and businesses in its path. CoreLogic® analyzed the area impacted to understand the potential damage.
The area impacted by the lava flow is a small, remote part of the Big Island of Hawaii, far from the popular cities of Kona and Hilo (Figure 1). The U.S. Geological Survey (USGS) monitors the volcanoes and has identified a “thermal zone” which has potential for risk. Within the entire thermal zone, there are 5,902 homes at potential risk. Of these, 1,029 homes are in the high-risk area. The area impacted is called the Leilani Estates. The average home value in this region is $230 thousand which puts the total value of residential properties at high risk around $239 million. It is important to note that a high-risk property does not guarantee that it will burn, but knowing the weight of the risk is essential for insurance companies and homeowners.
According to the most recent report by Hawaii County Civil Defense on June 23, 2018, lava is covering an area of 6,144 acres. A total of 637 homes in this area have been destroyed,6 which is a total value of approximately $146.5 million lost.
The area within the thermal zone has been evacuated, but beyond life safety, a big concern is insurance for the lost homes. Many have questioned the insurance coverage for homes lost to lava flow in Hawaii. The insurance commissioner of Hawaii Gordon Ito had commented on May 9 that most homes are covered by standard homeowner policies as the structure was lost to fire7—but this is not always the case as some policies have exclusions for lava.8
Lava has yet to stop flowing in Hawaii, and if the past 35 years have been telling, it is unlikely to suddenly cease. While much of the lava is running off into the ocean, growing the island bit by bit, the risk remains for those homes and homeowners yet unaffected. Having a strong grasp on that risk is paramount to make smart decisions when it comes to selecting a policy which protects and restores homes.
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