Insurance Hour

Wildfires have become an annual headline in California — and with each major blaze, homeowners, insurers, and policymakers are reminded just how fragile the state's insurance ecosystem has become. The Franklin Fire, which recently threatened hundreds of homes in Malibu, has once again ignited public anxiety about coverage, affordability, and the future of California's fire insurance market.

In a recent On Your Side interview, insurance expert Karl Susman joined journalist Christine Lazar to unpack what this fire means for homeowners and the broader insurance industry. His insights offer a sobering look at the realities of living — and insuring — property in wildfire-prone regions.

Susman began with a reminder that in moments of crisis, safety must always come before property. It's human nature to want to check on one's home during an evacuation, but as he noted, "Do whatever you need to do first to be safe. Property is property."

However, preparedness before disaster strikes is equally vital. Once a fire starts, insurers often freeze policy activity — meaning no changes can be made until the emergency ends. If you haven't reviewed your coverage before evacuation orders are issued, it's too late to adjust it mid-crisis.

Susman advises every homeowner to:

• Keep a digital copy (PDF) of your insurance policy.

• Have your insurer's contact numbers readily available.

• Maintain an evacuation go-bag with essential documents and valuables.

In other words, preparation is the best insurance you can have.

Many Californians don't realize their homeowners insurance may include "loss of use" coverage, which pays for temporary living expenses if you're forced to evacuate.

This can include:

• Hotel stays or temporary housing

• Meals

• Laundry or transportation costs

Susman encouraged policyholders under mandatory evacuation orders to

In California's rapidly evolving insurance landscape, one term keeps resurfacing in every serious policy discussion: reinsurance. While it might sound like an abstract industry concept, it is, in fact, the invisible safety net that keeps the insurance market stable, solvent, and responsive to consumers' needs.

During the California Department of Insurance (CDI) Workshop on the Net Cost of Reinsurance and Ratemaking on December 5, 2024, veteran insurance expert Karl Susman delivered pointed remarks that crystallized a growing concern within the industry — that California's regulatory structure is unintentionally punishing insurers for doing the very thing that protects consumers most: buying reinsurance.

At its core, reinsurance is insurance for insurance companies. It allows insurers to share part of the financial risk they take on when writing policies. By purchasing reinsurance, an insurer spreads potential losses across multiple entities, effectively creating a safety cushion that ensures claims can be paid even after catastrophic events — such as wildfires, earthquakes, or massive storm systems.

As Susman explained during his testimony:

"It's common sense. If we want to ensure there's enough money to pay claims, we'd rather have a policy backed by several reinsurance companies than just one. Many wallets of money are better than one."

This risk diversification benefits everyone — insurers gain financial stability, and consumers gain confidence that their claims will be honored. In essence, reinsurance is a consumer protection tool disguised as a business transaction.

California's insurance market, long governed under Proposition 103 (1988), gives the Department of Insurance tight control over rate approvals. Insurers must file detailed justifications for every rate increase, including actuarial data on losses, expenses, and risk exposure.

Here's the problem, as Susman outlined it:

"In the calculation of those expenses, the department does not permit insurance companies to include the actual costs they've paid for reinsurance."

This creates what he described as a "disincentive for financial prudence." In other words, insurers who buy reinsurance — a prudent act that makes them more stable and reliable — are effectively penalized, because they cannot recover those costs in the rates they charge policyholders.

Insurance isn't just about paying premiums — it's about making sure those dollars work for you when life happens. Whether you're a homeowner in wildfire territory, a rideshare driver navigating complex coverage, or a crypto investor looking for digital protection, understanding your options is the key to saving money and avoiding devastating losses.

In a recent episode of Insurance Hour with Karl Susman, listeners called in with real-world questions that revealed just how complicated — and crucial — insurance education has become. From California's FAIR Plan to flood coverage and usage-based auto programs, Susman explained how smart choices today can prevent financial chaos tomorrow.

Let's break down the biggest takeaways from this insightful episode.

Carlos from San Bernardino called in with a question thousands of Californians are asking: Is the FAIR Plan a good idea if no one else will insure my home?

Karl's answer was refreshingly honest — "It depends."

The California FAIR Plan was designed as a last resort for homeowners in wildfire-prone or high-risk areas who can't find coverage through standard carriers. It provides fire-only insurance, covering perils like fire and lightning — but not water damage, theft, or liability.

To fill that gap, Susman recommends pairing the FAIR Plan with a DIC (Difference in Conditions) policy through a private insurer.

"Think of the FAIR Plan as your fire protection," he explained. "Then add a DIC policy to restore everything else your regular homeowners insurance would normally cover."

The key takeaway:
✅ The FAIR Plan isn't ideal — but it's far better than being uninsured. Always work with a licensed broker to combine FAIR Plan fire protection with supplemental coverage for full protection.

Next came Jake from San Diego, who bought a home near the beach and wanted to know if his homeowners policy would cover flood damage.

Karl's answer was crystal clear:

"Flooding is never covered under your standard homeowner's policy. You need a separate flood insurance policy."

Flood insurance can be purchased through FEMA's National Flood Insurance Program (NFIP) or private carriers. Prices vary depending on elevation, flood history, and proximity to water — but don't assume FEMA is always cheaper.

In this episode of Insurance Hour, host Karl Susman dives into listener-submitted questions, covering essential insurance topics relevant to California residents and beyond. The episode addresses critical insurance considerations such as earthquake insurance deductibles, umbrella policies for renters, flood insurance, and comprehensive versus collision auto coverage. Karl also explores nuances around business property coverage for home-based businesses, personal jewelry insurance, and GAP insurance for financed vehicles. With practical advice and real-life examples, Karl provides listeners with a clearer understanding of how to make informed decisions in selecting appropriate coverage.

Wanna text us?

Insurance Hour is hosted by renowned insurance expert Karl Susman. Karl is a frequent guest on television stations such as ABC, CBS, Spectrum, The CW and FOX, and now his popular radio program is available online throughout California and world-wide.

Listeners can now tune in to Insurance Hour on great AM radio station KMET throughout the state of California.

In addition to traditional radio, Insurance Hour is available on several popular streaming platforms, ensuring that listeners can access the show at their convenience.

Audiences worldwide can now enjoy Insurance Hour at InsuranceHour.com, on YouTube, Amazon Music, Tuneln, Alexa, Apple Podcasts, and the iHeartRadio app.

For more information about "Insurance Hour" and its programming, please contact Lara Starr at [email protected]

When it comes to protecting what matters most — your home, car, family, and livelihood — insurance is both a shield and a mystery. Policies can be dense, deductibles confusing, and fine print intimidating. In a recent episode of Insurance Hour, host and insurance expert Karl Susman unpacked some of the most common and costly mistakes people make when it comes to insurance. From misunderstanding earthquake coverage to neglecting proper liability protection, Susman's message is clear: being informed is the best insurance of all.

Living in California means accepting one fact — the ground will shake again. Yet, many homeowners mistakenly assume that their standard homeowners policy automatically includes earthquake protection. It doesn't.

As Susman explains, earthquake insurance is a separate policy entirely, and one that's worth serious consideration. Deductibles typically range from 2.5% to 25% of your insured value, not the total damage or market value of your home. For instance, if your home is insured for $500,000 and you have a 10% deductible, you'd be responsible for the first $50,000 in earthquake repairs.

While that may sound steep, the alternative — being left with nothing after a major quake — can be financially devastating. Companies like GeoVera, a California-based earthquake insurer, now offer customizable plans that make coverage more accessible and affordable.

The takeaway? Check your policy. If earthquake coverage isn't listed, you don't have it. And when the next big one hits, that oversight could be catastrophic.

Umbrella insurance sounds fancy — and it is, in the best way possible. This type of policy provides extra liability coverage beyond your auto, home, or renter's insurance.

Many people think umbrella insurance is only for the wealthy, but that's a dangerous misconception. As Susman notes, "Anyone who drives a car, owns a pet, or entertains guests has liability exposure."

Here's the key distinction: umbrella policies don't protect your things — they protect you and your assets if you're sued for bodily injury or property damage. For example, if your auto policy covers up to $300,000 in liability and you're sued for $1 million, an umbrella policy could cover the remaining $700,000.

Umbrella coverage also extends to legal defense costs, which can quickly deplete your limits. Be sure to check whether your policy includes defense costs outside the liability limit — otherwise, your million-dollar policy might shrink to half that once attorney fees are deducted.

Susman' ...

In this episode of Insurance Hour, hosted by Karl Susman, the focus is on listener-submitted questions about various real-life insurance scenarios. Topics include homeowners insurance covering fence damage after storms, filing claims for auto damage from accidents like paint spills and potholes, and understanding how neighborly mishaps, like children breaking windows, are handled. Karl also discusses when earthquake insurance is essential, the nuances between collision and comprehensive auto coverage, and why small claims may affect premiums. The episode closes with Karl encouraging listeners to stay prepared with the right coverage and emphasizing the value of consulting insurance agents for tricky situations.

Wanna text us?

Insurance Hour is hosted by renowned insurance expert Karl Susman. Karl is a frequent guest on television stations such as ABC, CBS, Spectrum, The CW and FOX, and now his popular radio program is available online throughout California and world-wide.

Listeners can now tune in to Insurance Hour on great AM radio station KMET throughout the state of California.

In addition to traditional radio, Insurance Hour is available on several popular streaming platforms, ensuring that listeners can access the show at their convenience.

Audiences worldwide can now enjoy Insurance Hour at InsuranceHour.com, on YouTube, Amazon Music, Tuneln, Alexa, Apple Podcasts, and the iHeartRadio app.

For more information about "Insurance Hour" and its programming, please contact Lara Starr at [email protected]

In the world of insurance, it's rarely the big disasters that trip people up — it's the small ones. A broken fence after a storm, a spill in your car, or a cracked window from the neighbor's kids. These everyday mishaps may seem minor, but when they happen, the question is always the same: "Does my insurance cover this?"

In a recent episode of Insurance Hour with Karl Susman, Karl tackled a full lineup of listener questions that uncovered the hidden truths behind these "small" claims. From fences to potholes to paint spills, his insights shed light on how coverage actually works — and what to do before filing a claim that could raise your premiums.

The episode opened with Dennis from Kansas, whose wooden fence was ripped apart by high winds during a storm. His question: would his homeowner's insurance cover it?

According to Susman, the answer is most likely yes — but with caveats.

"Even though a fence doesn't feel like part of your home, it's usually covered under the 'Other Structures' section of your homeowner's policy," he explained.

Other Structures coverage typically includes detached items on your property — fences, sheds, gazebos, or detached garages. If they're damaged by a covered peril (like wind or fire), you can file a claim under that part of your policy.

However, there are exceptions. In certain states, wind coverage is excluded or requires a separate policy, especially in tornado or hurricane-prone regions. The key takeaway?
✔ Always review your policy's list of covered perils.
✔ Ask your agent whether wind or storm coverage applies where you live.
✔ Keep records and photos of your property for proof of damage.

The next listener — who had accidentally spilled white paint all over the backseat of a new car — asked a painful but common question: Will my auto insurance cover a mess I caused myself?

Karl's answer: It depends on the type of coverage.

Auto insurance generally has two physical damage coverages:

• Collision: Damage while your car is moving and strikes something.

• Comprehensive: Damage from non-collision incidents (theft, fire, vandalism, falling objects, etc.).

But what about self-inflict ...

For years, California has faced an insurance crisis that no one could ignore — not homeowners, not insurers, and not state regulators. Skyrocketing premiums, disappearing coverage, and catastrophic wildfires have turned what was once the nation's most robust insurance market into one teetering on the edge of collapse.

But that may finally be changing.

In a recent interview on KTVU's On Your Side, insurance expert Karl Susman broke down the details of Insurance Commissioner Ricardo Lara's Sustainable Insurance Strategy — a sweeping modernization plan designed to stabilize California's insurance landscape and bring major carriers back into the market.

"We've already fallen over the edge," Susman said. "Right now, less than 10% of the insurance market is open for business. This plan is about bringing competition back — because without competition, rates will never come down."

Over the past decade, California's insurance market has been battered by forces on all sides.

The state has endured some of the most expensive wildfire seasons in U.S. history. Between 2017 and 2021, insurers paid out more than $25 billion in claims. Fires like the Camp, Woolsey, and Tubbs wiped out entire neighborhoods, forcing companies to reassess their risk appetite.

California's insurance laws, particularly Proposition 103 (1988), restrict how insurers calculate and file rates. Carriers must base their prices on historical loss data, not forward-looking risk models. In a world where climate change has rendered the past unreliable, this rule makes it nearly impossible for insurers to price accurately.

State Farm, Allstate, and others have paused or reduced new policies, citing the inability to keep up with reinsurance costs and wildfire risks. As they pulled out, the California FAIR Plan — a last-resort fire insurance pool — ballooned to record levels, now covering hundreds of thousands of homes.

"We have no competition," Susman explained. "When you can't shop around for a better rate, the few companies left can charge whatever they need to stay solvent."

Commissioner Ricardo Lara's Sustainable Insurance Strategy aims to correct this imbalance by making Ca ...

When the unexpected happens — a burst pipe, a fallen tree, or even a dog bite — few homeowners are truly prepared for the maze of decisions that follow. Should you file a claim? Will your premiums skyrocket? What happens if your neighbor's tree crushes your garage, or if you accidentally hit a fence with your car?

These are the kinds of real-world questions tackled in Insurance Hour with Karl Susman's recent episode, "Disaster Strikes! Can Your Insurance Handle It?" In this listener-focused edition, Karl brings his trademark mix of humor, empathy, and deep industry expertise to explore how insurance actually functions when disaster becomes personal.

From water damage to liability coverage, here's what consumers — and agents — can learn from these insightful stories.

The episode opens with a question from Martha, a homeowner who returned from vacation to find her kitchen flooded due to a burst pipe. Her story is one many Californians can relate to: ruined cabinets, soaked hardwood floors, and an emerging mold problem.

Karl immediately clarifies one of the most misunderstood insurance terms: "flooding."

"Flood damage," he explains, "isn't the same as water damage. Flooding comes from rising water — that's only covered by flood insurance. A broken pipe, however, is usually covered under your homeowners policy."

While Martha's loss seems clear-cut, Karl highlights a critical distinction — timing and maintenance matter. If a pipe bursts suddenly and unexpectedly, that's a covered peril. But if it's due to long-term neglect or a slow leak, the claim could be denied.

His top tip? Install an automatic water shut-off valve.
These inexpensive devices can detect continuous water flow and stop it before a small leak becomes a catastrophe — a particularly valuable safeguard for homeowners who travel frequently.

Martha's second concern was whether filing a claim would cause her premiums to skyrocket. Karl's answer reflects the nuance often missing from generic insurance advice.

"If the claim is substantial, file it," he says. "But if it's small enough that you can handle it yourself, it's often better to pay out-of-pocket and keep your 'zero-claims' discount."

In essence, filing a claim should be a strategic decision, not an emotional one. Small, frequent claims can erode your loss-free status and lead to higher rates. Large, unavoidable claims? That's what insurance is for.

When the Mountain Fire tore through Ventura County, it took only minutes to erase entire neighborhoods. Families who had lived in their homes for decades were left standing in ashes, sifting through remnants of their lives — jewelry melted to silver dust, family photos charred beyond recognition, heirlooms reduced to memory.

Among the victims were Kim and Lynette Wynn, sisters who lost their home in Camarillo in just 12 minutes. "I'm the sibling that keeps all the memories," Kim said tearfully. "All the heirlooms from my great-grandparents — everything's gone."

Their loss mirrors that of thousands of Californians who have watched wildfires consume not just their property but their sense of security. And while some families were able to rebuild thanks to their homeowners insurance, many others faced a devastating discovery: their policies had been canceled just days before the fire began.

"I feel for those folks," one survivor said. "How are they going to rebuild? We're talking hundreds of thousands — millions."

In a recent Insurance Hour appearance on FOX's On Your Side, insurance expert Karl Susman explained what's happening — and why more and more homeowners are being forced onto California's FAIR Plan, the state's insurer of last resort.

For many residents, the tragedy of the Mountain Fire began not with the flames, but with an envelope in the mail — a non-renewal notice from their insurance company.

"We're hearing from homeowners who lost their coverage just days before the fire," Susman explained. "That's becoming far too common."

California's insurance crisis has reached a critical point. Major carriers — including State Farm, Allstate, and Farmers — have paused or severely limited new policies in high-risk wildfire areas. Others are non-renewing existing customers whose homes fall within updated "risk zones."

Why? The financial math no longer works. Between inflation, construction costs, and back-to-back wildfire seasons, many insurers are paying out more than they collect in premiums. And under California's strict rate regulations (dating back to Proposition 103), companies can't easily adjust pricing to reflect today's escalating risks.

"This is the perfect storm," Susman said. "Carriers have been afraid of exactly this — fire after fire after fire — and we're living it right now."

While the Wynns lost everything, other families managed to rebuild thanks to robust coverage — but even they acknowledge how fragile that protection has become.

Take Lori Brennan, who rebuilt her Malibu home in just 1 ...