By Benjamin Finnerty (S), REALTOR® (RS-83812) with Keller Williams Realty Maui · Kīhei, Maui · 808-481-9748

Quick Answer: Starting January 1, 2027, Hawaiʻi’s Act 256 (SB 2964, signed July 14, 2026) requires homeowners insurance producers to tell policyholders at least every two years that they can submit home improvements for an updated replacement cost estimate. If coverage falls short, the insurer must offer to raise it to full replacement cost.

I’m Benjamin Finnerty, a REALTOR® in Kīhei with Keller Williams Realty Maui. Homeowners insurance replacement cost isn’t a topic most buyers think about until something goes wrong, and Maui has seen what that costs. After the August 8, 2023 wildfires, many Lahaina and Kula homeowners learned their policies would cover far less than rebuilding. Hawaiʻi’s new law is aimed squarely at that gap, and it’s worth understanding whether you own now or are buying soon.

What does Hawaii’s Act 256 require?

Act 256 adds two main duties for homeowners insurance, effective January 1, 2027. First, at least once every two years, your insurance producer (agent or broker) must send you a written notice, on paper, saying you may submit information about improvements to your home, including the type and cost of each, to update your replacement cost estimate. Producers may accept your response electronically.

Second, the producer must pass that information to your insurer, and the insurer must reevaluate the home’s replacement cost. If your dwelling coverage limit is below the new replacement cost estimate, the insurer must offer to raise your limit to match it. The offer has to include the premium, stay open for 30 days, and be renewed annually.

Act 256 at a glance	Details
Bill	SB 2964, SD 1, HD 1, CD 1
Signed	July 14, 2026 (Governor’s Message No. 1358)
Effective	January 1, 2027
Notice frequency	At least once every two years, in paper form
Insurer duty	Reevaluate replacement cost; offer coverage up to full estimate
Offer terms	Includes premium, open 30 days, renewed annually
Penalty	$250 per violation

Sources: Hawaiʻi State Legislature (SB 2964 CD1 and Governor’s Message No. 1358).

Why did Hawaii pass a homeowners insurance replacement cost law?

The Legislature passed Act 256 to address underinsurance. The bill’s findings say underinsurance slows disaster recovery and raises the cost of nonprofit and government aid, and they point to the 2023 Maui wildfires, where many homeowners were “severely underinsured.” Lawmakers also noted that most homeowners don’t get regular updates on whether their coverage keeps pace with rebuilding costs.

Maui Sen. Angus McKelvey introduced the bill. As introduced, it would have required yearly rebuilding-cost estimates, according to Hawaiʻi Public Radio. The final version is narrower. It puts more responsibility on the homeowner to submit improvement information, and it requires insurers to offer added coverage rather than automatically adjust it.

Does Act 256 change my premium?

Not by itself. The law requires a notice and an offer. It doesn’t require you to buy more coverage, and it doesn’t set premiums. If you accept an offer to raise your dwelling limit, your premium will likely go up, and the insurer must show you that premium in the offer.

The real value is information. A remodeled kitchen, a new roof, solar panels or an added ohana unit can all raise what it would cost to rebuild. If your policy hasn’t caught up, Act 256 gives you a structured way to find out.

Does the law apply to Maui condo owners?

That’s not clear from the text. Act 256 applies to “homeowners insurance” as defined in an existing section of Hawaiʻi insurance law (HRS §431:14-110.8), and the bill doesn’t mention condominium policies specifically. If you own a condo, ask your agent whether your unit-owner (HO-6) policy is covered by the new notices.

Condo associations have their own insurance challenges. Act 296 of 2025 reactivated the Hawaiʻi Hurricane Relief Fund to offer hurricane coverage to condo and townhouse associations that have been turned down by at least two licensed insurers and have a total insured value above $10 million, according to the state Insurance Division.

How is replacement cost different from a home’s market value?

Replacement cost is what it would take to rebuild the structure, not what the home would sell for. On Maui, land often makes up a large share of a property’s price, so a home’s dwelling coverage may be well below its purchase price. At the same time, construction costs here are high, so coverage based on an old estimate can fall short quickly.

That’s why I suggest buyers ask their insurance agent for a replacement cost estimate during escrow, not after closing. I cover more of the buying-side insurance checklist in my post on insurance costs to check before you make an offer, and flood coverage in my post on Maui flood insurance and the NFIP.

My Take: What I’m Telling Buyers and Sellers

For current owners, I wouldn’t wait for the first Act 256 notice. Start a simple file now with receipts, permits and photos for every improvement you’ve made, along with the year and cost. When the notice arrives in 2027, you’ll be able to respond in minutes. And if you’ve done a major project, call your agent this year and ask for an updated estimate.

For buyers, insurance belongs in your due diligence period, alongside the inspection. Ask for a quote with a current replacement cost estimate before your contingency deadline, and ask whether it’s written at full replacement cost or actual cash value for items like the roof. Those answers can change your monthly budget.

For sellers, a well-documented improvement history helps your buyer’s insurance agent quote accurately. That can smooth escrow, especially for older homes or homes with additions.

This is general information, not tax or legal advice. Confirm with a CPA or Hawaiʻi attorney, and review coverage questions with a licensed insurance agent.

Frequently Asked Questions

When does Hawaii’s Act 256 take effect?
January 1, 2027. Governor Josh Green signed it on July 14, 2026.

Will my insurer automatically raise my coverage?
No. The insurer must offer added coverage if your limit is below the reevaluated replacement cost. You decide whether to accept.

How often will I get the notice?
At least once every two years, on paper, from your insurance producer.

What happens if an insurer doesn’t comply?
Act 256 sets an administrative penalty of $250 per violation.

Does Act 256 cover condo unit policies?
The text applies to “homeowners insurance” as defined in HRS §431:14-110.8 and doesn’t mention condo policies. Ask your agent how it applies to your policy.

Ask Benjamin

If you’re buying on Maui and want help building insurance into your timeline and budget, I’m glad to help. I’m Benjamin Finnerty. Call or text 808-481-9748 or email benjamin@the808team.com.

Sources: Hawaiʻi State Legislature (SB 2964 CD1; Governor’s Message No. 1358); LegiScan (SB 2964 status); Hawaiʻi Public Radio (April 24, 2026); Hawaiʻi Department of Commerce and Consumer Affairs, Insurance Division (Act 296).