Hawaii Island has three active volcanos. While the risk of having a lava flow inundate any individual property on the island is low, the hazard is not the same in all areas. The USGS geologists and volcanologists put together a series of Lava-Flow Hazard Maps over the years, most recently in 1992. This map has 9 hazard zones with lava zone 1 being the most hazardous and 9 considered to have the least hazard of lava flow inundation. In developing these maps, they took into consideration topography and rift zones around the active and dormant volcanos on the island.
Lava-flow hazard zones are intended by the USGS to be used by the public to determine general lava hazards over an extended period of time. However, mortgage lenders and insurance companies use these maps to set premiums, rates and to make lending decisions. For example, I do not know of any institutional lenders willing to lend on a property in lava zone 1. Insurance, to my knowledge, is also unavailable. There are some lenders willing to lend in lava zone 2. Hazard insurance is also available in zone 2, but most companies charge a higher premium and the specific risk of lava inundation is not included in the policy. When you get to lava zone 3 and higher, there really are no restrictions on the financing and insuring of these properties. I should note that the uninsured owners in lava zone 1, who lost their homes in the 2018 eruption were eventually eligible to sell their property to the County of Hawaii. I believe the buyout maxed out at $230,000, which was pretty close to full pre-eruption value for most.
As you might expect, real estate prices are very affordable in lava zones 1 and 2. Most of the homes in these areas are pretty basic but not always. Often, they will be completely off grid with no electricity and in most cases on catchment for water. In Hawaii, Solar electric is very efficient and powers many of the homes. It's simple, affordable living in paradise and many folks wouldn't want to live any other way. Just another thing that makes Big Island real estate unique. There's something for everyone.