2026-09-10 · Hawaii · Legislation

Hawaii has decided that underinsurance is a disclosure problem as much as a pricing one. Act 256 (2026) adds four new sections to article 10E of the insurance code under the heading “Replacement Cost Disclosure and Insurance to Value.” Governor Green signed it on July 14, 2026; it takes effect January 1, 2027.¹²

Read the scope first, because it is where most association readers will stop: this is a homeowners policy mandate. It is not a condominium master-policy fix, and it does not amend chapter 514B.

The biennial notice

“At least once every 2 years,” the Act says, “each insurance producer of homeowners insurance shall provide the policyholder with a written notice informing the policyholder that the policyholder may submit information regarding improvements made to the insured residential property, including the type of improvement and the costs of that improvement, for purposes of preparing an updated replacement cost estimate.”

One drafting choice stands out. The notice must be “delivered in paper format; provided that the insurance producer may allow responses to be submitted electronically.” Paper out, electronic back — a deliberate asymmetry, and a rare one in a 2026 statute.

The offer that has to be made

The producer must forward what the policyholder sends to the insurer, and the insurer “shall use the information to reevaluate the replacement cost.” Then the operative duty: “if the dwelling coverage limit is less than the replacement cost, the homeowners insurer shall offer the policyholder the option to purchase additional coverage… to increase the dwelling coverage limit to equal the replacement cost.”

That offer has three attached conditions. It must “include the premium for the increased coverage”; it must “remain open for 30 days”; and it must “be renewed annually.”

The penalty

“A fine of $250 for each violation.” Per violation, not per policyholder and not per year — which for a producer running a book of thousands of homeowners policies is the number that makes the biennial notice a systems project rather than a memo.

1. Governor's Message 1358 — signing of Act 256 (SB 2964), July 14, 2026 ↩
2. Legislative Reference Bureau, Bills Enacted — Regular Session of 2026 (Act 256, effective January 1, 2027) ↩
3. Legislative Reference Bureau, Bills Passed — Regular Session of 2026 (SB 2964 C.D. 1, sections affected) ↩