For Our Neighbors: Island Insurance’s Part in the Maui Wildfire Settlement

Nearly three years after the August 2023 Maui wildfires destroyed most of Lahaina, a $4 billion settlement is now moving toward its first payments, expected as early as July or August 2026 [1]. Island Insurance was the first of more than 160 insurers to accept settlement terms, a step that helped move the process forward. 

The Settlement and What It Means

The $4 billion settlement was reached in August 2024 with several parties [MT1] allegedly responsible for the fires, including Hawaiian Electric Co., the State of Hawaii, Kamehameha Schools, Spectrum Oceanic LLC, Hawaiian Telcom, and affiliates of West Maui Land Co. [1]. As of mid-April 2026, nearly 22,000 claimants had filed more than 94,000 claims covering wrongful death, personal injury, property loss, business interruption, and other damages [1]. 

More than $1.1 billion is held in a Bank of America trust account, ready to be distributed [1]. The payments will be issued over four years, with one installment each year [2]. Due to the volume of claims, administrators expect the first round to take about six months to fully process [1]. 

A Roadblock That Could Have Delayed Everything

Before payments could move forward, a significant legal issue needed to be resolved. More than 160 insurance companies had paid out claims to their policyholders and were seeking at least partial reimbursement from the settling parties [1]. That dispute threatened to hold up the entire settlement process.

Without a resolution, individual victims faced the prospect of years of additional court proceedings before seeing any money. [1] 

How Island Insurance Helped Break the Stalemate

The attorneys representing plaintiffs worked out an agreement with Island Insurance first, which accepted a 10 percent payout on its claims [2]. That individual agreement gave Judge Peter Cahill, the Maui Circuit Court judge overseeing the case, the opening he needed to push both sides back to the table with mediator Keith Hunter of Dispute Prevention & Resolution Inc. [1]. 

The broader effort resulted in an agreement reached in February 2026 and approved in April. Every one of the 160-plus insurers chose to join the deal before a May deadline [1]. 

Cynthia Wong, a Maui attorney who served as liaison ounsel for plaintiffs, credited Island Insurance’s willingness to act first as the turning point:

“We had one local carrier that was willing to go out on a limb, basically, and wanted to break the barrier and not be a part of the band of insurance companies that were continuing their appeals.”

Island Insurance was not the largest financial contributor to the settlement. Its role was more strategic: by moving first, it helped shift momentum and showed that a workable agreement was possible.

What This Means for Those Affected by the Fire

Under the final arrangement, insurers will receive back a portion of what they paid out in claims. Importantly, that repayment comes from later settlement installments, not the first distribution, so initial payments to victims will not be reduced by it [1].

Sources

1. Gomes A. Maui wildfires settlement poised for first payout. Honolulu Star-Advertiser. Published June 7, 2026. Accessed June 2026. https://www.hawaiitribune-herald.com/2026/06/08/hawaii-news/maui-wildfires-settlement-poised-for-first-payout/

2. Huff D. Maui wildfire settlement payments could reach victims as soon as April. Hawaii News Now. Published March 6, 2026. Accessed June 2026. https://www.hawaiinewsnow.com/2026/03/07/maui-wildfire-settlement-payments-could-reach-victims-soon-april/