Good news: The volcano is erupting, and lava is flowing in your direction, but it’s flowing very slowly so you have time to gather your belongings and move to safety.

Bad news: The volcano is erupting, lava is flowing in your direction, and there’s no way to divert it. All you can do is watch it destroy your home or business.

The residents of Pahoa, Hawaii, on the Big Island, have been watching the lava creep steadily closer since June, and on Nov. 10, it claimed its first house. These are the same residents who are starting to recover from damage caused by Hurricane Iselle in August. Nahua Maunakea, director, global risk management for I.H.S. in Englewood, Colo., described the lava as “rolling fire.” The intense heat of the lava can cause combustion and fire before the lava reaches the building. “It’s slow, insidious, inevitable,” Maunakea said. “Even though you can prepare for the disaster, it’s traumatic.” During previous lava flows, he noted, some residents took extreme measures to protect their homes. They jacked their houses up on stilts, put them on trucks and moved them some distance away.

A major issue for Pahoa residents and business owners is the condition of their property after the lava flow stops. For many, there will be no property left to go back to. “Insurance will make them whole as far as the building and contents go,” Maunakea pointed out, “but the cost of the land isn’t included in the recovery.” The situation is similar to the one faced by survivors of Hurricane Sandy who found that the storm washed away their land and pushed the shore farther inland.

Affected area covers 500 square miles

It’s difficult for most people to get a handle on the enormity of the damage and the landscape. As Robert Joslin, president of Hawaii Public Adjusters in Wailuku, Maui, explains in an e-mail: “The Big Island of Hawaii is made up of seven districts, and the Puna District, the area affected, is about the size of the island of Oahu, which is about 500 square miles or half the size of Rhode Island.” He also explains that the entire district has about 32,000 permanent residents, and approximately 1,100 of them live in the town of Pahoa.

Predicting where the lava will flow or where fires will break out also is difficult. “You’re not trying to put out a large fire. You’re trying to put out the earth,” Joslin points out. Most of Hawaii’s prior lava flows have moved both above and below the surface. “The issue then becomes a matter of predicting the out-spurts that could break through somewhere 100 yards or even 10 miles away. Our lava flows could be uphill, downhill, 50 yards wide and 3 feet tall or 50 feet wide and 20 feet tall. They disappear only to pop back through at the area of least resistance. A lava flow can go up a hill because it’s actually being pressed out through the earth’s surface. Eventually it will either go dormant, reappear miles away, or keep flowing downhill until it meets the ocean.” Unlike large wildfires, you can’t drop water from helicopters or set backfires to contain the burn.

Insurance coverage questions

As early as Oct. 31, Pahoa residents were urged by Hawaii Insurance Commissioner Gordon Ito to contact their insurance companies about insurance questions regarding abandonment of property, loss of use, alternative living expenses, and vandalism. “We want to remind people to focus on their safety and well-being instead of worrying about coverage rumors,” Ito said in a statement.

The Hawaii Department of Insurance publishes a lava informational brochure thataddresses key questions for homeowners and renters such as:

What can I do if I don’t have homeowner’s insurance? Mitigate the amount of damage by removing all belongings from your home. Start making a plan for where you can stay and store your belongings until you find a permanent solution.
Will my homeowner’s insurance policy cover damage from lava? Each policy is different. In general, if your home or structure is damaged as a result of the heat from a lava flow causing a fire, the damages may be covered as a fire peril.

The brochure doesn’t address additional concerns for businesses, however, or possible exclusions. For example, most policies cover property loss “as the result of a volcanic blast, airborne shock waves, ash or dust,” according to the Insurance Information Institute (I.I.I.). Fire or explosion from volcanic eruption is also covered. However, the I.I.I. points out that the cost to remove ash from personal property is covered only when the ash first causes direct physical loss to the property. But removing ash from the surrounding land isn’t covered.

The I.I.I. also notes that with optional comprehensive coverage under the auto policies, damage to vehicles caused by lava flows is covered, as is sudden damage to engines from volcanic ash or dust. Without a separate earthquake policy, damage from earthquake, land tremors, landslide, mudflow, or other earth movement isn’t covered even when the quake is caused by or causes a volcanic eruption.

Business interruption coverage

Business interruption insurance could apply if the business has direct physical damage from the volcanic eruption that forces the business to suspend operations, there is physical damage to other property that prevents employees or customers from getting to the business, or the government shuts down the area. Most business interruption policies have a 72-hour waiting period before coverage begins.

Looting and vandalism can be problems after evacuation, even in Paradise. Luckily, most homeowners, renters, and business policies cover property damage, vandalism and theft.

According to the I.I.I., volcanic effusion, a combination of volcanic water and mud, isn’t covered under most standard policies but it is covered under a flood insurance policy. Although volcanic effusion isn’t usually an issue with Hawaii’s lava flows because there isn’t much soil, flooding may be a problem for waterfront properties as the lava reaches the ocean.

Big Island declared disaster area

On Nov. 3 President Obama declared the Big Island a disaster area, eligible for disaster assistance. This authorizes the Federal Emergency Management Agency to make its Public Assistance program available to reimburse eligible emergency protective actions taken by the state, county and certain private nonprofits (PNPs) to save lives and protect public health and safety, such as emergency repairs, operating shelters, and security forces in the disaster area. “The Public Assistance program should not be confused with FEMA’S Individual Assistance and does not provide financial assistance to homeowners or individuals,” said Ken Suiso, the Federal Coordinating Officer for response and recovery operations for this disaster.

In the meantime, all the Big Island residents can do is watch, wait and take precautions against smoke exposure from burning vegetation and low levels of sulfur dioxide.

Below, the Kilauea lava flow ignites its first home (Source NBC News):

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