Hawaii & Alaska

HI - Report: Insuring Hawaiʻi's Coral Reefs Is Possible

Protecting coral reefs is a goal for many organizations around the state and the world. There are environmental restrictions and other regulations to protect the reefs. And now there's a new concept -- reef insurance.

Reefs provide numerous benefits, such as being a sustainable food source and attracting visitors from around the world. But one of the most important benefits is protecting coastal areas -- by reducing wave energy and storm surge hitting shorelines.

But climate change and its broader effects will continue to impact coastlines -- affecting the ability of reefs to protect against those threats.

A new report from The Nature Conservancy, with support from the Bank of America Charitable Foundation, found a way to insure reefs in Florida and Hawaiʻi by using a model developed in Mexico.

In 2018, The Nature Conservancy began the process to develop an insurance policy for the Mesoamerican barrier reef in Quintana Roo, Mexico. On October 7, 2020, Hurricane Delta hit the Yucatan Peninsula, triggering an $800,000 payout for reef repairs.

But reef insurance is based on a different model than what you may be used to.

"Often times, what you'd have to do is you have to prove damage, and the cost of that repair. And then the insurance pays out for a portion of that," said Kim Hum, director of The Nature Conservancy's marine program. "Those are called indemnity [policies]."

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