As survivors move closer to receiving shares of a $4.03 billion settlement, lawyers and insurance advocates said many will not recover all of their losses, including some who had property insurance.
Checks could begin as early as June, said Jake Lowenthal, one of four liaison lawyers for plaintiffs. Claims administrators will divide payments among 10 categories, including personal injury and home loss, under a process that is still being finalized.
Plaintiffs’ lawyers asked to collect 25% of clients’ awards, but Maui Circuit Court Judge Peter Cahill had not approved that request. He has instead considered a common benefit fund to compensate lawyers who did most of the work on the case.
Lowenthal said payouts will come in four installments. Property insurers are set to receive 10% of settlement payments made to insured homeowners under an agreement reached after the Hawaii Supreme Court ruled insurers could not sue Hawaiian Electric Co. and other defendants directly.
Medical insurers may also recover costs through liens on medical claims. Unless Congress restores an expired federal tax exemption for wildfire settlements, survivors could also owe federal income tax on the money.
About 21,750 plaintiffs sought shares of the settlement, representing 94,816 claims across the 10 categories, said Sherry Peterson, a fellow with United Policyholders, an insurance consumer advocacy group. “My personal opinion, having sat with many victims of this disaster, is that none of them are going to be made whole by this,” Peterson said. “No matter how you dice the carrot, there’s just not enough carrot for the soup.”
The settlement pool included about $1.99 billion from Hawaiian Electric, about $800 million from Hawaii taxpayers, $807.5 million from Kamehameha Schools, and smaller amounts from Maui County, telecommunications companies using utility poles, and companies affiliated with Maui landowner Peter Martin.
Insurers had paid $3.03 billion in fire-related claims as of December, according to the Hawaii Insurance Commission, including $2.16 billion to settlement participants.