Maui residents' post-fire rebuilding plans caught in insurance payout limbo

Five months after the massive wildfires destroyed Maui and displaced thousands of residents, many are still facing hurdles when it comes to housing and rebuilding their homes.

Thousands of insurance claims are still being processed, leaving many policyholders with unanswered questions about their claims and not enough funds to cover their growing expenses, according to experts.

Mahealani Strong, a Lahaina native and insurance executive who is overseeing over 1,000 home and auto claims, told ABC News Live that, on average, policyholders need 40% more than what they were insured for "in order to cover the cost to rebuild."

"Nobody bought their home thinking it would be completely toasted by a fire," she said. "There are a lot of people that under-bought insurance because they didn't plan for something like this to happen."

As the wait continues, some displaced residents said they are feeling desperate as they are running out of options for temporary housing.

"Everything here is so expensive. So I'm just hoping and praying for the best," Nelan Ceser, a displaced resident who has been living in a hotel shelter since August, told ABC News Live.

As of last October, more than 3,700 homeowners have filed insurance claims in the Maui fire, with nearly 1,500 of those properties suffering a total loss, according to Hawaii's state insurance division. The agency's data shows roughly 40% of claim money has not been paid, totaling more than $440 Million.

Strong said she and her team of six have been trying to help policyholders since the day of the fire and trying their best to quell their exasperation with the complicated process.

"I think some of my biggest frustrations are fighting for what I believe they should be getting and getting a kickback or having to wait until it goes through a process," she said.

Strong said there are some cases where a current policyholder inherited their generational home from a family member and all of the insurance information wasn't reviewed.

Another roadblock for some was homeowners who moved off the island and rented the home to tenants, but didn’t have the correct policy for rental properties.

Ceser said she has only received some money from her insurance company but is still waiting for when more money can be delivered.

"There's no answer to that question we asked. We don't know. We don't know. So that's the big problem and issue for me and for everyone," she said.

The state stepped in to assist homeowners with insurance claims. Shortly after the fire, state insurance commissioner Gordon I. Ito urged insurers not to cancel policies or refuse renewals.

Rep. Jill Tokuda, D-Hawaii, told ABC News Live that that she and other elected officials are asking insurance companies to be more supportive.

"I think a message that we have to all the insurance companies, the carriers out there – we need your help. We need you to be a part of taking care of our people now in the disaster they have experienced," she said.

However, carriers are making changes, according to Strong.

"The way that they are protecting themselves moving forward is by putting stipulations and conditions on the policy when it's time for renewal," she said of insurance companies.

As some homeowners wait for the money to rebuild, others are stuck in legal roadblocks when it comes to plans for emergency housing.

Alfy Basurto, a Maui businessman, plans to build 11 more mobile homes on the land he owns in an upscale gated community in Lahaina.

The mobile homes would be operated through his nonprofit organization, Rebuild Maui.

Basurto told ABC News Live before the fires he was planning on building five small homes on his land but changed his proposal after the fire.

"I want to share my land with people that would provide housing. Waiting for the government is not going to come in and make us whole. It is truly not. So I think our responsibility to help each other out, I believe in that so strongly," he said.

However, the Pu'unoa Homeowners Association sued Basurto contending he doesn't have the right to build on his property.

"The Maui County Code requires permits for the construction of residential building or structures," the suit contended. "Defendants have failed to properly obtain such permits as are required."

Basurto claimed he spoke with county executives about his mobile home proposal and was told "because it's an RV and because it's got registration for the DMV and it's got a safety certificate, it doesn't require permitting."

A court hearing is scheduled for Jan. 11 about the matter.

Housing experts stressed that solutions need to be made soon, as more than 2,400 households remain displaced, with the governor pushing for 1,500 short-term rentals on Maui to convert to long-term housing by March 1.

Ceser said she is in forbearance on her mortgage until she gets more details and hopes that this year can bring closure to her tragedy.

"I want to rebuild our house. So I've been there for, like, seven years, and it's so hard for me to leave Lahaina. My heart belongs to Lahaina," she said.