"We targeted this bill to help the average condominium building, not the luxury high-rises," Representative Scot Matayoshi said when Governor Josh Green signed Hawaii's insurance stabilization package into law. He chairs the House Consumer Protection and Commerce Committee, and he was describing Act 296, the bill that reactivated the Hawaii Hurricane Relief Fund after three decades of dormancy.
Wailea and Makena are almost entirely luxury high-rises and gated resort communities. So before anyone in escrow on a South Maui condo assumes the statewide "insurance crisis is easing" headline applies to their building, it's worth reading the clause that decides whether it does.
What the relief fund actually covers
The Hawaii Hurricane Relief Fund does not insure a building from dollar one. It only pays claims above a $10 million attachment point, and only for wind damage from a hurricane. Every association still has to buy primary coverage for the first $10 million on the open market, from a private insurer, at whatever rate that insurer is willing to write.
To even apply, an AOAO has to show it was denied hurricane coverage by at least two licensed Hawaii insurers and that the building's total insured value exceeds $10 million. That second condition sounds like it should exclude small buildings and favor the big ones. In practice it means most Wailea and Makena resort towers clear the size threshold easily. It does not mean the fund solves their problem.
Think of it as two layers stacked on top of each other. The bottom layer, the first $10 million, is still the private market's to price. The fund only shows up once that bottom layer is exhausted.
The layer that still decides your closing
| Coverage layer | Who provides it | What it costs the association |
|---|---|---|
| Primary (first $10 million) | Private or surplus lines insurer | Full market rate, still elevated since 2023 |
| Excess (above $10 million) | Hawaii Hurricane Relief Fund | Actuarially set, backed by the state |
| Deductible | Association | 2 percent of insured value on HHRF-backed policies |
That deductible line matters more in Wailea than almost anywhere else on Maui. The fund sets its deductible at 2 percent of insured value. For a $100 million building, that's a $2 million deductible before the fund pays a dollar. Most Wailea and Makena buildings, given their construction cost and unit values, sit well into that range. A relief program built around a percentage works very differently for a $30 million Kihei complex than it does for a beachfront Wailea tower insured at three or four times that.
Why the rate history matters more than the rate today
According to the April 2026 Star Advertiser report, before the August 2023 Lahaina wildfire, Hawaii condo insurance ran roughly 8 to 9 cents per $100 of insured value. After the fire pushed the state into a higher risk category for international reinsurers, some buildings saw that climb past $1 per $100, more than a tenfold jump. As of an April 2026 legislative update, rates have moderated into the 20 to 30 cent range.
That is real progress. It is also still roughly two to nearly four times the pre-fire baseline, and it is a statewide average, not a Wailea number. A rate expressed in cents per $100 turns into very different dollar figures depending on what the building is worth, and Wailea's oceanfront resort inventory carries some of the highest per-unit insured values on the island.
The scale of what triggered this law is worth keeping in view too. One Waikiki high-rise saw its premium rise from $235,000 to over $1.2 million before Act 296 passed. That's the kind of jump lawmakers were responding to, and it's the kind of jump that pushes a board straight to a special assessment if reserves can't absorb it.
Why lender requirements can affect your financing
Here is the clause that actually stops a closing. Fannie Mae and Freddie Mac require a condo building to carry insurance covering 100 percent of its replacement cost before they will buy the mortgage on any unit inside it. Primary lenders sell roughly 70 percent of their mortgages to those two agencies. If a building's coverage falls short of full replacement value, even by 20 or 30 percent, agency financing disappears for every buyer in that building, not just the one asking about a claim.
That is not a hypothetical. Reporting on Hawaii's broader insurance situation has noted that many associations, trying to control premium costs, have chosen policies covering only 20 to 30 percent or less of a building's hurricane exposure, then filled the rest through surplus lines insurers that Hawaii's Insurance Division has no authority to rate-regulate. A board can make that trade rationally and still leave every unit owner facing a narrower buyer pool at resale, because agency financing may be unavailable even though some portfolio or jumbo lenders may still consider the building. Value does not show up on the appraisal that way. It shows up in how few offers come in and how long the unit sits.
What the state's own numbers say about where this stands
The same Star Advertiser report said that, as of an update to state lawmakers, the fund had received 311 applications from condo associations since its relaunch and issued 97 policies, covering roughly $2.6 billion in insured value on about $2.7 million in written premium. Another 45 applications had received quotes and were still deciding whether to move forward, representing close to $3 billion more in coverage.
Officials also credited the fund with more than $12 million in total savings statewide, split between premium reductions on policies actually written through the fund and price concessions associations negotiated with private insurers simply by having an HHRF quote in hand to negotiate against. That second number is the more interesting one for a Wailea board. The fund's biggest effect so far may not be the policies it writes directly, but the leverage it gives an association's broker at the negotiating table.
None of that tells you what your specific building has done. It tells you the tool exists and that many associations who apply have received a quote. Whether your association has applied, accepted, or decided the primary layer still isn't affordable is a building-specific fact, not a statewide one.
What to ask for before you remove a financing contingency
- The current declarations page for the master policy, showing what percentage of replacement value is actually insured
- Whether the AOAO has applied to the Hawaii Hurricane Relief Fund, and the result if so
- The most recent reserve study and whether insurance costs are funded inside it or handled through separate assessments
- A written history of special assessments tied to insurance, not just capital projects
- Confirmation from your lender, in writing, that the specific building has passed agency project review
None of these documents are unusual to request. What's changed since 2023 is how much weight they carry. A declarations page that used to be a formality is now the single document most likely to determine whether your loan closes on schedule.
A few questions that come up often
Does the Hawaii Hurricane Relief Fund mean Wailea condo insurance has gone back to normal? Rates have moderated from their post-fire peak but remain well above pre-2023 levels as of the most recent legislative update. The fund adds a backstop above $10 million in losses. It does not set or subsidize the price of the primary coverage every building still has to buy first.
If a building is denied by insurers, does that automatically qualify it for the fund? An AOAO needs documented denials from at least two licensed Hawaii insurers and a total insured value over $10 million. Meeting that bar gets a building in the door. It doesn't guarantee the primary layer below $10 million becomes affordable.
Can a buyer still get financing if a building's coverage is short of full replacement value? Sometimes, through a portfolio or jumbo lender willing to underwrite outside agency guidelines, often with a larger down payment. Fannie Mae and Freddie Mac themselves will not purchase the loan, which is why buildings in this position tend to see their buyer pool narrow toward cash offers.
Where does the new Condominium Loan Program fit into this? It offers financing for repairs that improve insurability, administered through the Hawaii Green Infrastructure Authority. Insurance Business reports that eligibility requires a rejection letter from a financial institution and a commitment to obtain full replacement coverage as a condition of the loan. State officials have said funding for actual projects is still likely years away given permitting timelines, so it's a future tool for buildings willing to invest in repairs now, not an immediate fix for a deal closing this quarter.
If you're weighing a specific building in Wailea or Makena and want to know exactly where its insurance and financing status stands before you write an offer or remove a contingency, Kela Fernandez can help you get the right documents in front of the right people early, so nothing about the building surprises you at the closing table.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
