More than 140 insurance industry plaintiffs, including State Farm, Swiss Re and Lloyd’s, have reportedly joined lawsuits filed against utilities and landowners related to the Maui, Hawaii wildfires, which destroyed much of Lahaina and killed 100 people back in August of 2023.
According to a Honolulu Civil Beat report, insurance industry players are now seeking to collect reimbursements for claims paid to policyholders, which total more than $1 billion in West Maui for residential property alone.
Honolulu Civil Beat’s report said that the plaintiffs include State Farm Fire and Casualty Co., USAA Casualty Insurance Co., Island Insurance and Tradewind Insurance; alongside reinsurance giant Swiss Re, Mitsui Sumimoto Insurance, and Lloyd’s.
Meanwhile, the defendants include Hawaiian Electric, Hawaiian Telcom, Kamehameha Schools and other unnamed parties the insurers allege were negligent in allowing the fires to start and spread.
If you remember, back in August of 2023, in response to the lawsuit filed by the County of Maui, Hawaiian Electric denied that their equipment was responsible for igniting the main Lahaina fire.
Robert Anderson, director of the Center for Risk Management Research at the University of California, explained that if the losses occurred because of negligence, insurers and reinsurers can sue the negligent parties to recover the payments in the same way that a health insurance company could seek to recover the costs of treating someone injured in an automobile accident.
Honolulu Civil Beat’s report noted that when you multiply this by thousands of claims, it spells out why the enormous number of insurance company plaintiffs, spread out over 26 states and a half dozen countries, are filing suit in Hawaii.
Sumner LaCroix, an economist with the University of Hawaii Economic Research Organization, added, “It’s also a sign that the global insurance market is functioning adequately to spread the risk of a major catastrophe in Hawaii.
“The last thing we want in Hawaii is to find out that two or three companies bear the risk of having a hurricane hit Hawaii.”
Mark Davis, a Honolulu trial lawyer who is serving as a liaison for dozens of plaintiffs lawyers who have filed suits on behalf of victims in Maui court, observed that the suit could have major implications in the long run for plaintiffs seeking to recover claims for damages from Hawaiian Electric and the others.
He continued, “The insurance companies and other plaintiffs have a common goal: to prove that the utilities or landowners or both acted negligently in allowing the fires to start and spread. The insurance industry has had its own teams of investigators.”
Catastrophe risk modeller Karen Clark & Company estimated last year that the insured property losses from the Lahaina Fire will be around $3.2 billion, with more than 2,200 structures damaged or destroyed.
KCC estimated that in total more than 3,000 structures were impacted by the fire, with approximately 2,170 acres burned, making it the most destructive wildfire in Hawaii’s history.
