Claims Handling Requirements by State – Hawaii

Recently I received a number of requests for states in this series. I promise I am working through all the requests in the order I received them. Up next, the Aloha State – Hawaii.

An insurance carrier in Hawaii must comply with article 13 of Hawaii’s insurance code, Haw. Rev. Stat. §431. While not providing many specifics, the code gives general guidance to insurance carriers. The code bars insurance carriers from engaging in unfair or deceptive claims handling practices.¹ Specifically, a carrier must not misrepresent pertinent facts or policy provisions relating to the claim.² The carrier must respond to communications “with reasonable promptness, in no case more than fifteen working days,” and the responses must be substantive and not simply an acknowledgment of a communication.³ They must adopt and implement reasonable standards for the prompt investigation of claims.⁴ While it should go without saying, an insurance carrier in Hawaii cannot deny a claim without conducting a reasonable investigation based upon all available information.⁵

Further, the carrier must affirm or deny coverage of the claim within a reasonable time after a proof of loss has been submitted.⁶ Interestingly, the Hawaii code prevents insurers from requesting a formal proof of loss when they have already requested a preliminary submission that contains substantially the same information.⁷ The carrier must attempt in good faith to effectuate prompt, fair, and equitable settlements of claims once liability is clear.⁸ Once the amount of loss has been determined, payment must be made within 30 days.⁹ The carrier must provide the insured with a reasonable written explanation for any delay, if the claim is not resolved within 30 days of the carrier receiving notice.¹⁰ When a check is sent, the carrier must not indicate that it is final payment if it is reasonable to believe further payments could be owed.¹¹ They must not offer less than the amount a reasonable person would have believed the insured was entitled to or force an insured into litigation by offering substantially less than the amount recovered in litigation.¹² An insurance carrier cannot delay payment under one coverage of the policy where liability is clear in an effort to influence the settlement under another coverage.¹³

Finally, an insurance carrier must provide a reasonable explanation of the basis in the insurance policy for denial of a claim or for the offer of a compromise settlement.¹⁴

When I think of Hawaii, like everyone else, one thing comes to mind – Magnum, P.I.

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¹ Haw. Rev. Stat. §431:13-102.
² Haw. Rev. Stat. §431:13-103(a)(11)(A).
³ Haw. Rev. Stat. §431:13-103(a)(11)(B).
⁴ Haw. Rev. Stat. §431:13-103(a)(11)(C).
⁵ Haw. Rev. Stat. §431:13-103(a)(11)(D).
⁶ Haw. Rev. Stat. §431:13-103(a)(11)(E).
⁷ Haw. Rev. Stat. §431:13-103(a)(11)(N).
⁸ Haw. Rev. Stat. §431:13-103(a)(11)(H).
⁹ Haw. Rev. Stat. §431:13-103(a)(11)(F).
¹⁰ Haw. Rev. Stat. §431:13-103(a)(11)(G).
¹¹ Haw. Rev. Stat. §431:13-103(a)(11)(Q).
¹² Haw. Rev. Stat. §431:13-103(a)(11)(I) & (J).
¹³ Haw. Rev. Stat. §431:13-103(a)(11)(O).
¹⁴ Haw. Rev. Stat. §431:13-103(a)(11)(P).