Get the fair value you deserve for your totaled vehicle in Hawaii

Hawaii regulates first-party automobile total losses through three layered authorities: the Unfair Methods of Competition and Unfair or Deceptive Acts or Practices statute at HRS § 431:13-103, the motor-vehicle-specific total-loss statutes at HRS §§ 431:10C-309, 431:10C-310, and 431:10C-311 (which set the operational valuation framework), and the common-law tort of first-party bad faith recognized by the Hawaii Supreme Court in Best Place, Inc. v. Penn America Insurance Co., 82 Haw. 120, 920 P.2d 334 (1996). Hawaii does not impose a separate licensing requirement on a policyholder's appraiser invoked under the policy's appraisal clause. HRS § 431:13-103 — Unfair Claim Settlement Practices. The statute defines acts that constitute unfair claim settlement practices when committed in conscious disregard of the policy or with such frequency as to indicate a general business practice, including: misrepresenting pertinent facts or insurance policy provisions; failing to acknowledge and act with reasonable promptness on claim communications; failing to adopt and implement reasonable standards for the prompt investigation of claims; refusing to pay claims without conducting a reasonable investigation; failing to affirm or deny coverage of claims within a reasonable time; not attempting in good faith to effectuate prompt, fair, and equitable settlements when liability is reasonably clear; and compelling insureds to institute litigation to recover amounts due. HRS § 431:10C — Motor Vehicle Insurance. Hawaii's motor vehicle insurance code includes specific provisions governing personal injury protection (PIP) and motor-vehicle coverage. First-party total-loss settlements are governed by HRS §§ 431:10C-309 (total-loss motor vehicle claims), 431:10C-310 (total-loss motor vehicle claims: replacement), and 431:10C-311 (total-loss motor vehicle claims: cash settlement), in addition to the general UCSPA at HRS § 431:13-103. HRS § 431:10C-311 in particular contains cash-settlement valuation rules, dealer-quotation requirements, and prohibitions on certain deductions; readers should consult the current statutory text for the operative requirements. Best Place, Inc. v. Penn America Insurance Co., 82 Haw. 120, 920 P.2d 334 (1996). The Hawaii Supreme Court recognized first-party bad faith as a tort separate from breach of contract, holding that the implied covenant of good faith and fair dealing in every insurance contract supports tort liability when the insurer's conduct is unreasonable. Both compensatory and, on appropriate factual showings, punitive damages are available. Salvage titling in Hawaii. Hawaii's salvage certificate process is governed by HRS § 286-48 (Certificates of ownership of salvaged motor vehicles) and HRS § 286-44.5 (Salvage certificate); Hawaii does not appear to codify a specific percentage-of-fair-market-value threshold by statute. Industry practice in Hawaii is commonly described as following the Total Loss Formula (TLF), an industry methodology rather than a Hawaii Revised Statutes provision; the exact threshold applied by a given insurer should be verified against the policy and the insurer's documentation. Hawaii does not impose a separate licensing requirement on a policyholder's appraiser invoked under the policy's appraisal clause.

Hawaii's first-party bad-faith doctrine is anchored in Best Place, Inc. v. Penn America Insurance Co., 82 Haw. 120, 920 P.2d 334 (1996), which recognized first-party bad faith as a tort separate from breach of contract and grounded the cause of action in the implied covenant of good faith and fair dealing inherent in every insurance contract. Best Place is notable for its theoretical clarity — rather than treating bad faith as a statutory implication, the Hawaii Supreme Court rooted it in the contract itself, with both compensatory and (on appropriate factual showings) punitive damages available when the insurer's conduct is unreasonable. In the auto-claim total-loss context, the Best Place framework has been applied to insurer conduct including: (a) refusing to itemize condition adjustments; (b) using inter-island comparables without market-equivalency support; (c) refusing to address the insured's inability to purchase a comparable for the offered amount; and (d) failing to investigate the loss vehicle's island-specific market. Recent multistate class actions targeting "typical-negotiation adjustment" and similar undocumented Audatex/CCC line items have been pleaded in Hawaii as both statutory violations under HRS §§ 431:13-103 and 431:10C-311 and Best Place bad-faith claims, with substantial punitive-damages exposure on the table.