SB2963

SECTION 1. 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.

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. Disaster survivors often lack receipts, photographs, or other records needed to meet the detailed inventory documentation required by insurance companies. Requiring the preparation of these inventories is a major administrative hurdle that may affect the access to funds needed for basic necessities. Forcing disaster survivors to create these lists also prolongs emotional trauma and diverts their attention from the process of rebuilding or replacing their home.

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. These state laws still require the preparation of an itemized personal property inventory to obtain the full insured value under the insurance policy.

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. Total payouts remain capped at the coverage amount previously agreed to by the insurer and policyholder. 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. 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.

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.

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.

Accordingly, the purpose of this Act is to:

(1) 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;

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

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

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

"PART . HOMEOWNERS INSURANCE; RENTERS INSURANCE; PERSONAL PROPERTY

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

"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.

"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.

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

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

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

(2) 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. 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.

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

§431:10E- Notice to policyholders. 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."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 4. 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:	_____________________________

THE SENATE	S.B. NO.	2963
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII