Hawaii’s Supreme Court Upholds $4 Billion Maui Settlement

The Hawaii Supreme Court received the complaint from insurance companies and then acted quickly. However, the action isn’t what the insurers wanted to hear. The insurance companies wanted to be able to go after claims money they’ve paid out. The process is called subrogation.

The court said insurance companies cannot enter into subrogation and recoup those losses.

At issue is a $4 billion settlement of lawsuits and claims filed by thousands victims of the wildfires that killed 100 people on Maui and destroyed several thousand of dwellings and businesses in August of 2023.

The victims wanted Hawaiian Electric, the state of Hawaii, Maui County and Kamehameha Schools to be held accountable for the losses. Lawsuits were filed and negotiations produced a $4 billion settlement. While it doesn’t come close to really satisfying the victims, to get it over with, their legal representatives and the victims all agreed to the deal.

Insurance companies are out $2.3 billion in property claims and with another $1 billion needed to be paid on the books. They filed an injunction to block the settlement. As noted earlier, insurance companies want reimbursement for their claims payments by those responsible for causing the fire, and to those not responding correctly, or on time, which caused more loss of life and property.

The Supreme Court’s ruling says the insurers cannot enter into subrogation and get that money back.

Adam Romney is an attorney for the insurers. He said insurance companies immediately responded to claims to make sure the victims were made as whole as possible.

“Ultimately, we didn’t start the fire. We’re the people who start paying moneys immediately when the claims start coming in,” Romney said and noted the Supreme Court ruling is unfair and could ultimately lead to higher insurance costs for insureds in the future.

“We will have to pay more than the people who actually caused the damage, and that is fundamentally inequitable,” Romney said.

Source link: Insurance Business America — https://bit.ly/4jT1HfS