Lahilahi Heen has lived for decades in a three-bedroom house surrounded by a carefully groomed garden in the lush Hawaiian Shores subdivision in Lower Puna. It’s also downslope from Hawaii’s most active volcano.

Her house sits outside Pahoa Village in an area that was threatened by a lava flow from Kilauea volcano in 2014. The lava never reached her neighborhood, but the danger is ever-present and she now faces a new risk.

The price of her homeowner’s insurance soared from $1,500 in 2022 to $5,000 the next year. Heen couldn’t afford that, she said, so she took a risk. She scraped together $30,000 in mostly borrowed money to pay off her mortgage, so she could go without insurance.

“It was super, super stressful. I learned new swear words,” she said, recalling that decision.

Heen is one of thousands of Big Island residents coping with a dire shortage of inexpensive insurance in sprawling subdivisions built generations ago in the two most hazardous lava zones.

Those areas offer some of the most affordable housing in Hawaii. The median home price in Pahoa — the largest town in Puna — is about $360,000. But private insurers have almost entirely abandoned Lava Zones 1 and 2 because they were deemed too risky to cover.

For many homeowners there, that means the only coverage available is offered by the Hawaii Property Insurance Association, which was created by the state in 1991 to insure homes in the lava zones. But HPIA coverage has become so expensive that people in the lava zones are canceling their policies or putting their homes up for sale.

The insurance crisis in the lava zones could happen to other Hawaii homeowners as more dramatic impacts from climate change take hold across the state. Lawmakers, concerned that more private insurers may pull out, are preparing mechanisms to deal with that.

Earlier this year legislators considered bills to make coverage through HIPA and the Hawaii Hurricane Relief Fund available to homeowners who can’t obtain insurance through the private market if that becomes necessary.

But experts say little can be done about the escalating cost of coverage in the lava zones and other areas where private coverage is unavailable.

‘They’re just going without’

In the 1950s and 1960s, county officials allowed developers to chop up thousands of acres in high-risk lava zones and sell the land off as house lots with minimal infrastructure. In recent decades thousands of people have moved into those areas in large part because they offer cheaper housing in a state with one of the highest costs of living in the nation.

Puna, which at about 500 square miles is roughly the size of Oahu, was the site of an eruption in 2018 that destroyed more than 600 homes in Leilani, beginning the exodus of private insurers and a reliance on the Hawaii Property Insurance Association.

Andrea Rosanoff and her husband, Steven Sparks, have lived since 2003 in a home they built themselves in the jungle in Leilani Estates, a subdivision on Kilauea’s East Rift Zone.

They pay $5,900 a year for $350,000 in coverage, the maximum available. That is a huge strain for a couple living on Social Security benefits, but they are determined to stay put.

Some of their neighbors have been forced to make hard choices.

“What’s happening is, people who own their homes — many of them retired schoolteachers, retired nurses and so on who own their homes — many of them are just not buying insurance. They’re just going without,” Rosanoff said.

Other homeowners are paying for a year of insurance at the new, high rates to buy time so they can sell out, Rosanoff said. “It’s kind of decimating the homeowners of this very affordable area.”

Hawaii House Vice Speaker Greggor Ilagan, who represents the area, proposed several measures during the session this year. Two bills that called for capping insurance premiums and imposing a moratorium on foreclosures in the lava zones never got a hearing.

Another bill that quietly died would have created a pool of funding to subsidize insurance premiums for the lava zones.

Ilagan’s pitch is essentially that the state should intervene to help lower-income people who are in danger of being forced out of their homes, especially older adults on fixed incomes. That may include subsidizing premiums.

Some firmly disagree. Alison Ueoka, president of the Hawaii Insurers Council, said insurance prices should reflect the risk, and the lava zones are quite risky.

In fact, the Hawaii Property Insurance Association would like to raise rates even higher, she said. HPIA did not respond to a phone call seeking comment.

“If the state is going to choose to subsidize people who choose to live in the lava zones, I would imagine that everybody else would have their hand out for some subsidy as well,” Ueoka said. “What makes them more special than anybody else? I mean, they already got a cheaper price on the home.”

Lava-zone homeowners may be low-income residents, but “there are poor folks everywhere,” she said. The nonprofit insurers council represents about 40% of the property and casualty carriers operating in Hawaii.

‘Everybody’s scrambling’

Heen, a 64-year-old bank teller, said her old insurance company, Universal Property & Casualty, canceled her coverage when it left the Hawaii market. She worried that her bank would force her to buy even more expensive insurance or possibly even try to take her home if she went without.

So she paid HPIA about $5,000 for one year of coverage with money that was given to her as a gift, then dropped that policy once she paid off her mortgage.

She said she would like to buy coverage to insure her Hawaiian Shores home against hurricane damage, at least, but needs to save up for a while.

She met one woman who said she was losing her home because she can’t pay her bills and has talked with others who are urgently searching for cheaper housing because their landlords raised the rent to cover their insurance costs.

“Everybody’s scrambling for the same lower rent, or the possibility of lower rent,” Heen said.