A Housing Boom, Then a Volcanic Eruption

A Housing Boom, Then a Volcanic Eruption: 
"Lava flows from the Hawaiian volcano Kilauea have destroyed at least 26 homes and disrupted thousands of lives in the past two weeks. 
Reading this news, you might wonder why some Hawaii residents have chosen to live at the foot of an active volcano. 
The strange truth is that the state government encourages them.
Kilauea, located on the southeast side of the Big Island, is one of the most active volcanoes in the world. 
In geologic terms, it has been continuously erupting since 1983, when a lava flow destroyed 16 homes in a subdivision called Royal Gardens. 
...The destruction caused in the early 1990s cost private insurers millions of dollars, prompting them to stop insuring property in the most vulnerable areas...
Unfortunately, the Hawaii state government stepped in. 
In 1991 the legislature created the nonprofit Hawaii Property Insurance Association, which provides policies to people who can’t buy them on the market. 
But private insurers are forced to join the HPIA as a condition of doing business in the state. 
They split the HPIA’s expenses, profits and losses in proportion to their market share.
In essence, Hawaii law requires all private insurers to pool their resources to subsidize policies in Lava Zones 1 and 2..."
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