Maui Insurance Meltdown: Inside the Real Estate Risk With Jamie Peacock

Over the past year, one of the most frequently asked questions I get isn’t about property values, interest rates, or even vacation rental rules. It’s about insurance. And if you own a home or condo in Hawaii—or are thinking about buying—this is something you need to understand.

I recently sat down with Jamie Peacock, an independent insurance agent with Insurance Associates, to talk about the major shifts we’re seeing in the insurance world and how they’re impacting real estate on Maui and beyond. Jamie brought insight, clarity, and a healthy dose of realism to a topic that’s confusing a lot of folks right now.

Here are the key takeaways from our conversation:

What Triggered the Shift? Lahaina Changed Everything

Jamie explained that Hawaii’s insurance market was already “hardening” (A higher-than-expected number of catastrophic events in the last few years…watch video below for more details.) before the August 2023 Lahaina fires. But after $7 billion in losses and one of the most devastating wildfires in U.S. history, things accelerated. Premiums started to skyrocket, and coverage options became more limited—especially for properties considered higher risk, like wood-frame condos.

🏛 Admitted vs. Non-Admitted Insurance: Know the Difference

One of the most important things Jamie covered was the distinction between admitted and non-admitted (also called “surplus lines”) insurers. Companies like State Farm and All State are admitted insurers—regulated by the state and generally easier to work with in the event of a claim. Non-admitted insurers (like Lloyd’s of London) take on higher-risk properties, but with fewer regulations and protections for the policyholder. Right now, more and more Maui properties are ending up in the non-admitted market because traditional insurers are pulling back.

💸 Reinsurance Costs Are Driving Your Premiums

Here’s a big “aha” moment: the insurance companies we work with are also buying insurance—for themselves. It’s called reinsurance, and it’s what allows them to cover major disasters. After Lahaina, the cost of reinsurance went through the roof, and now those costs are trickling down to us. That’s a big part of why we’re seeing 20%–50% increases in both condo and homeowner insurance rates.

🧱 What Type of Building You Own Matters

If you’re in a wood-frame condo complex, you’ve likely felt the pain. After the fire, some insurers dramatically reduced coverage or exited the market entirely. That’s pushed buildings into “layered” policies—where multiple insurers each take a slice of the risk—which usually means higher premiums and more complexity.

But even if you’re in a concrete high-rise, you’re not off the hook. Water damage is a bigger risk in most multi-story buildings, especially when a leak can affect several units. Jamie emphasized how insurance companies are requiring sprinkler systems more than ever—especially in older buildings that haven’t retrofitted.

🏠 Homeowners: Time to Review and Maintain

Homeowners aren’t immune. Jamie shared that many are seeing 20%–50% premium increases. What can you do?

• Maintain your systems – Roof, plumbing, and electrical systems are under the microscope.
• Replace, don’t just coat – Insurers are favoring actual roof replacements over temporary fixes.
• Don’t cancel your current policy – Renew if you can. Getting a brand new policy may trigger tougher inspections and limitations.

💡 Final Thoughts and a Word of Advice

Jamie’s message was clear: now is the time to review your insurance coverage. Make sure your policy reflects realistic rebuild costs-  his recommendation was at least $500 per square foot. Especially after the demand surge created by the Lahaina recovery. Underinsurance is a real issue.

If you’re unsure about your policy, work with someone who understands the local market. Jamie and other independent agents can compare options and help you navigate this complex landscape.

As always, I’m here to help you make informed decisions. Whether you’re buying, selling, or just staying educated as a property owner, understanding the current insurance environment is critical for protecting your investment in paradise.

If you’d like to watch the full conversation and get even more detailed information with Jamie, click the video below:

 I’m happy to connect you with local experts like Jamie. Want a policy review or have insurance questions? For your insurance needs, contact Jamie at: (808) 633-6082 Jamie@insuringhawaii.com mauiinsuranceservices.com 1847 S Kihei Road, Suite 204, Kihei, HI, United States, Hawaii

Disclaimer: This blog post is intended for informational purposes only. Please consult a licensed insurance professional for advice specific to your property or situation.