Non-profit organization, The Nature Conservancy, bought it on behalf of the state,
giving its reefs up to $2 million of protection until the end of December 2023.
If it works, the first-ever U.S. coral insurance contract could become a model for defending reefs around the country.
The Nature Conservancy says conservation has, to date, relied mainly on philanthropy and government grants...
but using insurance could help tap into the private sector.
This is how the plan would work.
Coral reefs that fringe developed coastlines can limit flooding by providing a barrier against ocean storm surges,
meaning insurers have every interest in protecting them.
So if Hawaii experiences a storm strong enough to damage the reefs, the Nature Conservancy will get a payout from the insurance company.
The policy covers the majority of Hawaii, and will begin paying out at 50 knots of wind.
Teams known as the "Reef Brigades" will use the money to recover reef fragments,
store them, and re-attach them, using cement or epoxy.
The idea of insuring coral reefs is not brand new.
It was first tested by the Mexican state of Quintana Roo.
Local tourism businesses and the government bought an insurance policy to cover their share of the Mesoamerican Reef.
Environmental group the MAR Fund later took out a policy in other parts of Mexico, Belize, Guatemala and
Honduras.
The policies paid out for one storm in Mexico in 2020 and another in Belize in 2022.
In July 2022, Quintana Roo paid 6 million Mexican pesos - over $300,000 - to renew its policy.
While admitting it was a lot of money to pay, Mexico's Secretary of Ecology and Environment said losing the biodiversity would be worse.
Coral reefs around the world are at risk from climate change, overfishing and other human activities.
While insurance policies are one way to protect them, The Nature Conservancy concluded that "an unprecedented coordinated global effort among public, private and philanthropic sectors will be required for reefs to survive beyond the end of this century.''
