On August 8th, 2023, devastating wildfires spread across the Hawaiian Island of Maui and have now become some of the deadliest on U.S. record. The fires, which were centralized around the historic town of Lahaina, have caused hundreds of fatalities, thousands of families without homes, and billions of dollars in damages. Though the fires have since been contained, the damage lingers, and questions about efforts to stop the blaze have emerged. With the death toll still rising and damage estimates still growing, there is no doubt these wildfires will serve as a historic event in natural disaster history.
How Did the Maui Wildfires Start?
The official cause of the wildfires has not yet been declared, but a thorough investigation is underway with many experts considering a combination of hurricane winds and down power lines contributing to the violent spread. In addition, investigators are questioning whether or not decisions by the state’s primary electric company, Hawaiian Electric, played a role. The company is currently facing a lawsuit claiming that their power lines blown over contributed to the spread of the fires.
Prior to the start of the fires, the island was under warning for dry and harsh conditions following a category 4 hurricane. The National Guard was aware that the combination of low humidity and harsh winds could lead to potentially distressing weather, but was not prepared for the inevitable fires that ensued.
The fires began around 3:45am in the central area of Kula, Maui. The fire started as a small bush fire, which spread 3 acres from the wind reaching the historic town of Lahaina. Though the fire was at the point declared, “contained”, lack of fuel to pump water would prove to be a serious issue and lead to the fires spreading further. By 5 pm on August 8th, despite efforts to stop the spread, the wildfires became so severe that the entire town of Lahaina was ablaze and an emergency evacuation notice had been released.
The fires were not completely under control until the following morning on August 9th, by which point the majority of Lahaina and parts of western Maui were completely destroyed.
Estimated Damages from Maui Wildfires
According to the Pacific Disaster Center, about 2,170 acres were burned by the fires in total. Though the historic town of Lahaina witness the most damage, the fires also destroyed parts of western Maui and areas on the coast of The Big Island.
The fires destroyed historic landmarks and in total close to 3,000 structures. About 86% of the total structures destroyed were residential, urging emergency disaster relief Foundations to focus their efforts on housing and residential relief.
Final estimates are still underway but so far the costs have reached billions. The cost to rebuild Lahaina alone is expected to exceed 5.5 Billion, according to the Federal Emergency Management Agency, which the total estimate currently at about $7 Billion. With so many families displaced from their homes, there is widespread concern for housing and safety for those affected. FEMA has recently opened its first recovery center in Maui, urging locals affected by the fires to apply for federal assistance.
Will Insurance Respond to the Maui Wildfires?
In short, yes, insurance will respond to the fires and help financially with the damages caused last week as fire is a covered peril. However, it may take time to rebuild as insurance companies work through the thousands of claims that are expected to come through.
In addition, Hawaii has historically had some of the lowest rates of homeowners insurance. The first reason is that it is not required by law, so many opt to forgo coverage if they don’t feel they are at risk. Secondly, Hawaii has had very few natural disasters and has been considered a very low-risk state. Premiums vary from state to state and are based on the level of risk the property holds. In Hawaii, premiums are the lowest in the country, so many may not have high enough limits to cover the extensive damage caused by the fires.
Insurance companies will work diligently to respond to claims as quickly as possible and issue settlements to get residents back on their feet. In addition, emergency relief funds will provide some financial assistance to those without coverage, but it will be a long road to recovery.
It's likely that insurance companies will re-think their underwriting and raise premiums in the state of Hawaii given the extent of damage from the fires. Though this specific instance is the most drastic in over a century, it is another signal that natural disasters are on the rise in both frequency and severity.
Insurance for Your Personal and Commercial Property
Even if your business is located in a state that does not require insurance, it's crucial to secure coverage to protect your assets. Now more than ever unexpected events are causing severe losses that can put a significant financial setback on your personal or business matters. If you do have insurance and are unsure whether or not you have the best coverage, working with a professional agent or consultant can ensure you have no gaps, and that your limits adequately address the risks you might face based on location, assets, and common claims.
Insurance with ECBM
Find the best insurance coverage for your personal and commercial needs with ECBM. Our Philadelphia-based practice offers solutions for risk management, claim management, and financial preservation. We have agents and consultants who have expertise in all fields of business and personal insurance, and we’re dedicated to building comprehensive packages that protect your assets. For more information on our services and how we can help you optimize your coverage, contact our experts today.
