Insurer offering isle
hurricane coverage

Clarendon National Insurance
is the second firm to enter
the market after Iniki

By Peter Wagner
Star-Bulletin

A New Jersey-based insurance company has become the second to enter a local market fled by major carriers after Hurricane Iniki in 1992: homeowners hurricane coverage.

Clarendon National Insurance Co., represented in Hawaii by Triad Insurance Agency Inc., was recently licensed by the state Department of Commerce and Consumer Affairs to offer homeowners hurricane policies.

Clarendon joins Japan-based DTRC Insurance -- Dai Tokyo Royal State -- which was licensed last year. Both are newcomers to hurricane coverage in Hawaii.

Triad vice president Gary S. Brame sees Hawaii as a wide-open and lucrative market.

"We have spent over a year evaluating the homeowner's marketplace in the state of Hawaii and it is a profitable endeavor," said Brame "We will be able to make enough money to set up an adequate reserve to pay claims if a hurricane occurs."

The company's policies will be backed by $4.9 billion in reserves -- three times the $1.6 billion fund created by the state to underwrite its own policies after Iniki.

State officials are delighted to see the return of private industry.

"I think it's great," said Amori Ogata, executive director of the state's Hawaii Hurricane Relief Fund. "It's part of our mission to get these private companies back into issuing hurricane policies."

Facing an insurance crisis after the pullout of major carriers, the state set up its relief fund after Iniki. But officials readily admit the fund could fall woefully short if disaster strikes again.

"We have limited resources," Ogata said. "If losses were greater than $1.6 billion, we would have to prorate claims and make payments over time."

The state currently is underwriting about 160,000 homeowners hurricane policies -- most of the residential market. Rates are $1.49 per thousand of assessed value, or about $520 for a $350,000 house, above a homeowners annual insurance premium.

Brame said Triad's policies may cost a little more. But the benefit will be assurance that a claim will be paid promptly and in full, he said.

"The Hawaii Hurricane Relief Fund is inadequately funded," Brame said. "They would have to take out federal loans to the tune of several hundred million dollars and it would take them lot of time, perhaps years, to settle a claim. With us, you can rest assured you're going to get your settlement check within a reasonable amount of time and for the full amount."