Residents on Hawaii’s Big Island are discovering that their homeowner’s insurance covers all sorts of damage — but not from lava, smoke and other volcanic hazards as the Kilauea eruption enters its fourth month.

“I cannot count how many homeowners told me that their insurance agents told them to not worry about their lava exclusion, because everyone knows that fires burn houses during an eruption,” said Molly Ward, a Hawaii-based lawyer who specializes in insurance law. “That is what the agents themselves said.”

Lava exclusion clauses in homeowner insurance policies complicate an already troubling situation for the Big Island’s 190,000 or so dwellers. Being cut off by lava or shrouded in toxic ash might not be covered in many general policies. In some ways, their plight resembles that of homeowners in floodplains without flood insurance and in Gulf states without hurricane insurance.

What’s more, volcanologists say, there is no way to know exactly when Kilauea, Hawaii’s most active volcano, will stop erupting. The eruption, which started in May, apparently has subsided for now, but emergency services say they are prepared for it to last years.

Amber Lopez, an agent at Pacific Island Insurance, described how a lava exclusion worked in a case of fire damage incurred by one of the specialty insurers not regulated by the state. In one of the most active areas of lava flow, Lloyd’s of London offers a less-expensive policy for homeowners with a clause excluding damage directly and indirectly caused by lava.

“So in that circumstance, there would be no coverage,” Ms. Lopez said. “Because the carrier considers direct [damage] the lava flow and indirect the fire. So that is pretty clean-cut in the way they’re reading the policy.”

Ms. Ward argues that such exclusions should not be allowed because insurance policies don’t bar coverage for damage from lava and fire at the same time.

“And we all know that if you come too close to the sun or anything very hot, including lava, you’re going to burn, [and] in our case here, a considerable time before the lava comes,” she said.

“What has happened is absolutely devastating to us,” said state Sen. Russell E. Ruderman, a Democrat who represents the hard-hit Puna district near Kilauea.

“Lava flows in the past here have been slow-moving and easier to live with,” Mr. Ruderman said, and a similar eruption hasn’t happened “since humans have been living here.”

More than 700 homes have been destroyed by the eruption, and about 20 have been damaged but are salvageable, said a spokesperson for the Hawaii County Office of Housing and Community Development.

Kilauea’s latest eruption has caused at least $5.1 million in damage, said a spokeswoman for Hawaii County, which covers the entirety of the Big Island.

Mr. Ruderman said the Puna community had about 45,000 people before the eruption, but now it looks like a “ghost town” after half of its residents fled.

Leilani Estates, a residential development in one of the hardest-hit areas, was established only a few years after Kilauea erupted twice, just months apart, in 1959 and 1960. Mr. Ruderman said developers should have known better than to build in the area.

“If you can blame anything on government, it would be allowing people to live there in the first place. And not taking care of people that had bought and built there,” he said.

State lawmakers in 1991 created the Hawaii Property Insurance Association to give homeowners living in Kilauea’s shadow the opportunity to buy insurance after private insurers pulled out of the area. The association said it has insured about 600 homes in the riskiest lava zones with policies costing less than $2,000 a year for an average-valued home.

‘It’s just a mess’

Hawaii homeowners also have to contend with insuring their properties against hurricanes. The Big Island is typically the first in the chain to be hit by monster storms, usually taking the brunt of the damage, as it did with Hurricane Lane.

With the added liability of hurricane insurance, annual policy costs could reach $2,500 for Lava Zone 1, which is closest to Kilauea, said Ms. Lopez, the insurance agent. Lava Zone 2 is more affordable, with some policies as low as $700 a year.

Still, damage by molten lava is not the only problem homeowners face. Homeowners typically can claim “loss of use” if their property is deemed uninhabitable, but that isn’t always the case for homes landlocked by lava or shrouded in sulfur clouds.

Paul Klink, the manager of two Red Cross shelters on the island, said the health hazards can be deceiving.

“Because there’s situations where somebody’s home looks perfect,” said Mr. Klink, a first responder for Team Rubicon, a nongovernmental disaster relief organization. “You drive by and it’s like, ‘Wow, picture home.’ The grass is growing, everything is fine. Until you look closer and there’s dead chickens, cats, dogs, because the sulfur is so thick and so low it’s just deadly.”

Homes that aren’t directly covered for or damaged by lava but become isolated by the flows wouldn’t trigger a lava exclusion policy, Ms. Ward said.

However, when it comes to health concerns, homeowners may be out of luck. Owners could file for direct property damage or loss of use, but there are no protections for toxins in the air.

“People are being discouraged by their adjusters,” Ms. Ward said. “They give up. So they keep paying their mortgage even if they can’t live in their house anymore when there’s smoke, when there’s hydrochloric acid, when there’s fiberglass in the air.”

There is no doubt that the unprecedented level of damage by months of spewing lava, smoke and sulfur will impact the market for home insurance for the riskiest lava zones, but analysts are divided over how that will play out.

“The homeowner insurers on the Big Island are certainly going to revisit their market shares at the very least,” but it’s anyone’s guess how they will react, said Michael Berry, vice president of media relations for the Insurance Information Institute.

Mr. Berry said insurers may take an approach similar to one in the aftermath of Hurricane Katrina and employ “nonrenewals” to minimize the market share. On the other hand, the opposite could happen and insurance companies “who feel they can underwrite the risk better than the current players” could emerge, he said.

Mr. Ruderman isn’t optimistic about the availability of insurance when the ash settles and the lava slows.

“I think it’s going to be much harder to get insurance going forward,” the lawmaker said. “There are people wondering if [the Hawaii Property Insurance Association] should be able to continue to [offer coverage in Lava Zones 1 and 2]. There are people wondering if we should allow people to build out there.”

Ms. Lopez said she hopes the level of destruction will spur leaders to warn people before they move into risky zones.

“It’s just a mess. And I feel that it comes from the top and that the government should be educating people purchasing in this area,” she said.

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