Insurers head to court to seek redress for Maui wildfire losses
Insurers head to court to seek redress for Maui wildfire losses | Insurance Business America
Catastrophe & Flood
Insurers head to court to seek redress for Maui wildfire losses
Plaintiffs include big names like State Farm and USAA
Catastrophe & Flood
By
Mika Pangilinan
Several months after the devastating wildfires that destroyed much of the Lahaina community in Maui, some 140 insurance companies have initiated legal action against utility firms and landowners to seek reimbursement for claims they paid out to policyholders.
According to a report by the Honolulu Civil Beat, the plaintiffs include State Farm, USAA, Island Insurance and Tradewind Insurance, as well as international names like Swiss Re, Mitsui Sumimoto Insurance, and Lloyd’s.
Over $1 billion in claims for residential property damages have been paid out by insurers following the Maui wildfires, per the latest tally from the Insurance Division of the Hawaii Department of Commerce and Consumer Affairs. Insurers have also reported nearly 4,000 claims for residential property in West Maui, with 1,689 total losses.
To recoup these losses, insurers are seeking reimbursement from parties they allege were negligent in allowing the blaze to start and spread. Defendants include Hawaiian Electric Company (HECO), Hawaiian Telcom, and Kamehameha Schools.
Like other Hawaiian utility firms, HECO has been hit with several lawsuits in the fallout of the Lahaina wildfires. The company was sued by the Maui government in late August, with the suit alleging that HECO “inexcusably kept their power lines energized” despite a fire warning from the National Weather Service.
Since the fires, HECO has seen its stock price plummet and its credit lines nearly exhausted. During a quarterly earnings call for the period ended September 30, it reported $27.6 million in fire-related expenses, including legal fees of approximately $1.5 million per week.
The company is currently seeking federal grant funds for infrastructure rebuilding, according to the Honolulu Civil Beat. It also received a payout from its insurance policy, with a huge portion already allocated to a settlement fund for victims of the wildfires.
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