🎙️ Episode Overview

Karl Susman interviews R.J. Lehmann, Editor-in-Chief at the International Center for Law and Economics (ICLE), about California's insurance crisis, the origins and impact of Proposition 103, and the controversial intervener system that shapes insurance regulation in the state.

🔍 Key Topics & Insights 1. Background & Expertise

• Lehmann's long career spans journalism, policy, and think tank work (AM Best, R Street Institute, ICLE).

• He's studied all 50 states' insurance regulation, consistently ranking California near the bottom due to excessive red tape and price controls.

2. Proposition 103 — Then vs. Now

• Passed in 1988 amid public backlash over high auto insurance rates.

• Mandated:

  • Rate rollbacks and prior approval for all P&C lines.

  • Creation of an elected Insurance Commissioner.

  • A process allowing "interveners" (third parties) to challenge insurer rate filings — and get paid for doing so.

• Originally focused on auto, but over time expanded to property insurance, even though wildfire and reinsurance costs weren't envisioned at the time.

3. The Intervener System

• Designed for public oversight but now dominated by Consumer Watchdog, which receives ~85–90% of all intervener compensation.

• Interveners are paid by insurers whose rates they challenge — sometimes millions per year.

• Critics argue this creates "interveners for profit," incentivizing obstruction and boilerplate filings that delay rate approvals for years.

4. Market Fallout

The Impact of Wildfires on California's Insurance Market: What Homeowners Need to Know

As flames sweep across California's hillsides once again, the question isn't just about what's burning — it's about what's breaking.

For years, the state's insurance market has been stretched thin by a relentless cycle of catastrophic wildfires, insurer withdrawals, and mounting homeowner anxiety. Every new fire season raises the same haunting question:

How much longer can California's insurance system hold?

In a CBS–KCAL segment aired on September 11, 2024, investigative reporter Christine Lazar and insurance expert Karl Susman tackled this issue head-on, breaking down what these fires mean for homeowners, insurance availability, and future premiums. Their conversation painted a complex but cautiously hopeful picture — one where consumer protections, regulatory reforms, and market resilience still offer a path forward.

A Market Already on Edge

Even before the latest blazes, California's insurance landscape was fragile. Over the past two years, major carriers have paused or scaled back operations, citing unsustainable wildfire losses and outdated rate regulations that limit how they price risk.

Some companies have requested rate hikes as high as 40% to 50%, while others have stopped writing new homeowners' policies entirely in large parts of the state.

"We've had over 900,000 acres burn in California so far this year," Susman noted. "And about 1,200 structures have been lost. This is exactly what everyone's been worried about."

Each destructive event compounds insurer caution, driving up costs for consumers and pushing more homeowners into the state's last-resort FAIR Plan, which offers only basic fire coverage.

For homeowners, it's not just a financial burden — it's an existential one. Many wonder if their next renewal notice will bring another steep premium increase or a non-renewal letter altogether.

Why Wildfires Matter So Much to Insurers

To understand why these fires hit the insurance market so hard, it's important to remember how insurers operate.

Insurance isn't just about paying claims; it's about predicting and pooling risk. When wildfires destroy thousands of homes in concentrated areas, insurers face not just individual claims, but correlated losses — hundreds or thousands of claims at once.

That concentration of exposure breaks the traditional insurance model. It's like betting that not everyone will crash their car at the same time — and then discovering that, in fire zones, they sometimes do.

Without the ability to price risk accurately or raise rates quickly (due to California's regulatory system under P ...

How to Maintain Your Home Insurance After a Wildfire: What Every California Homeowner Needs to Know

When wildfires rage across California, the immediate focus is safety — evacuating, protecting loved ones, and securing what matters most. But after the flames die down, many homeowners face a second crisis: keeping or regaining their home insurance coverage.

In a recent NBC4 Los Angeles report, featuring insurance expert Karl Susman from Insurance Hour, the spotlight turned to a lesser-known but powerful safeguard that protects homeowners in the aftermath of declared disasters — California's mandatory one-year non-renewal moratorium.

This law, along with key coverage provisions and new market reforms, offers essential protections for anyone living in wildfire-prone areas. Here's what every homeowner should understand — and how to prepare long before the next red flag warning hits.

The Growing Crisis: When Insurance Companies Pull Back

California's worsening wildfire seasons have reshaped the insurance landscape. Tens of thousands of homeowners have been dropped by their carriers in recent years, especially in high-risk regions like San Bernardino, Napa, and Sonoma Counties.

As wildfires like the Line Fire in San Bernardino County continue to force evacuations and destroy property, many homeowners are asking:

"Will I still have insurance after this?"

According to Susman, that fear is understandable — but not always warranted.

"As soon as CAL FIRE establishes a perimeter," he explained, "the Department of Insurance will normally put a lock in place, meaning carriers cannot non-renew properties in that area for at least a year."

This is the heart of California's one-year moratorium rule, designed to give residents breathing room in the wake of natural disasters.

What the One-Year Moratorium Actually Does

When the governor declares a state of emergency due to a wildfire, the California Department of Insurance (CDI) automatically enforces a 12-month ban on insurance companies canceling or non-renewing homeowners' policies within or near the impacted zone.

This means:

• If you live within the wildfire perimeter or in an adjacent ZIP code designated by CAL FIRE and the CDI, your insurer cannot legally drop your coverage for one year following the declaration.

• The protection applies even if your home wasn't dam ...

In this episode of Insurance Hour, Karl Susman dives into a range of insurance-related topics, focusing on educating listeners about the fundamentals of insurance. Karl begins by exploring the history of insurance, tracing its origins to the 14th century and the evolution of mutual agreements into modern commercial policies. He highlights how the industry has grown, citing Lloyd’s of London as a key example. The discussion then shifts to how insurance is regulated in the U.S., with each state having its own Department of Insurance, and how that affects policyholders.

Karl also answers a listener's question about purchasing a home in an area where insurance companies refuse to write policies. He explains the possible reasons for an insurer's reluctance, ranging from the property's condition to its location. Additionally, Karl covers alternative options like surplus and non-admitted insurance markets.

Karl emphasizes that while claims adjusters are key players in settling claims, they are also people who can have good or bad days. He offers advice on how to handle disputes over claims, reminding listeners that there are escalation processes and regulatory bodies they can appeal to when necessary.

The episode concludes with a deep dive into various types of insurance agents—captive, employee, and independent—and tips for dealing with claims.

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From Shipwrecks to Skyscrapers: The Evolution of Insurance

Insurance is one of those things we all depend on but rarely stop to think about. It's there in the background — protecting our cars, homes, businesses, and lives — yet few people ever ask: Where did insurance come from?

In a recent episode of Insurance Hour, host Karl Susman took listeners on a fascinating journey through the history and evolution of insurance, from 14th-century shipping routes to the modern skyscrapers of global finance. His exploration revealed not just how the industry was born, but how it evolved from mutual trust into one of the most sophisticated economic systems on earth.

The Birth of Insurance: Genoa, 14th Century

Insurance began not as a business, but as a mutual agreement between people facing the same risks.

Back in the 1300s, merchants in Genoa, Italy faced a dangerous problem. Shipping goods across the Atlantic to the "New World" was perilous — storms, pirates, and shipwrecks routinely wiped out fortunes overnight. If a fleet of ten ships set sail, maybe only five would return.

Losing even one ship could bankrupt a merchant. So, the traders came up with a revolutionary idea: share the risk.

"Someone had the idea," Susman explained. "They said, 'We'll share the cost with you and share the profits with you. That way, if ten ships go out and only half make it back, you're not ruined — the loss is shared.'"

This marked the first form of marine cargo insurance — a mutual protection pact among merchants and financiers. Everyone had a stake in everyone else's success. If no ship sank, everyone profited. If some did, no one was completely wiped out.

That spirit of cooperation and shared exposure became the DNA of modern insurance.

From Mutual Trust to Market Enterprise

Over time, this cooperative model evolved into something larger — and more commercial.

As trade expanded, so did the need for more formal systems of protection. Instead of only merchants insuring each other, outsiders — investors who had no stake in the voyage — began to step in. They weren't shipping goods; they were betting on outcomes.

They collected premiums from shipowners in exchange for covering losses if a ship sank. If the voyage succeeded, they pocketed the premiums. If it failed, they paid out.

"It went from people doing the same thing and sharing the risk," Susman said, "to people who simply wanted to make money off the concept of insuring others."

That transformation — from mutual aid to for-profit enterprise — paved the way for the massive global insurance market we know today.

Navigating Insurance Challenges: What to Do When No One Will Insure Your Home

Imagine finding your dream home — the perfect location, just the right price — only to discover no one will insure it.

It's a reality that's becoming increasingly common in California and other high-risk regions across the United States. Between wildfire exposure, aging properties, and market contraction, more homeowners are discovering that traditional insurers simply won't write them a policy.

In this Insurance Hour episode, host Karl Susman tackled one of the toughest questions a homeowner can face:

"What do I do when I can't get insurance for the house I want to buy?"

Susman's answer was both candid and cautionary — part reality check, part roadmap. Because when insurers refuse to write coverage, it's not just bad luck. It's a signal.

Step One: Pause and Ask "Why?"

Susman's first piece of advice was simple: don't rush to find coverage at any cost — start by understanding why you can't.

"If you're looking to buy a house somewhere and no one wants to insure it, you need to ask yourself why," he said.

Insurance companies exist to sell policies. They want customers. If they're refusing to insure a specific property, there's a reason — and it's usually not arbitrary.

Possible reasons include:

• Location Risk: The home sits in a wildfire, flood, or earthquake-prone area.

• Property Condition: The roof is too old, the electrical system outdated, or the structure hasn't been maintained.

• Market Limitations: Even well-maintained homes can be caught in broader carrier restrictions if insurers have reached their capacity limits for a given region.

Susman emphasized that the issue might not always be the property itself. Sometimes the market is the problem.

"There are situations right now where the insurance market is so tight in certain states that it's not necessarily that the location is bad," he said. "It might just be that insurance carriers have reached their maximum capacity for that period of time."

In other words, even the safest homes can be left uninsured when carriers temporarily pause new business to stabilize their portfolios.

Step Two: Talk to an Independent Broker

If you're struggling to find coverage, your next call should be to a licensed independent insurance broker.

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Insurance Power Plays: How State Commissioners Shape Your Coverage

When most people think about insurance, they picture their agent, their premium, or maybe a claim they've filed. What they rarely consider is the architecture behind the system — the laws, regulations, and leaders who decide what insurance companies can and can't do.

In a recent episode of Insurance Hour, host Karl Susman explored one of the most overlooked but powerful institutions in American insurance: the state insurance commissioner.

These commissioners sit at the intersection of government, business, and consumer protection. They oversee the solvency of insurers, approve (or deny) rate filings, and enforce fair claims practices. In many ways, they determine how smoothly — or painfully — insurance works in your state.

Susman broke it down clearly:

"The insurance commissioner is basically in charge of all things relating to insurance in your state. They steer the entire industry in one direction or another."

Let's unpack how these commissioners come into power, what they do, and why understanding their role can help every policyholder become a more informed consumer.

The State-Based System: A Legacy of the McCarran-Ferguson Act

Insurance is one of the few major industries in America regulated almost entirely at the state level. This arrangement stems from the McCarran-Ferguson Act of 1945, a federal law that granted states the authority to oversee insurance operations within their borders.

"The states decide what they're going to do," Susman explained. "Each state has its own Department of Insurance — sometimes it's called the Department of Finance — but somewhere in every state bureaucracy, there's a division dedicated to regulating insurance."

That state-centric model creates a unique patchwork of laws and priorities. While the federal government handles banking, securities, and pensions, each state's insurance commissioner sets the tone for local insurance practices.

Elected vs. Appointed Commissioners

Not all insurance commissioners come to power the same way. According to Susman, nine states currently elect their commissioners directly:

California, Georgia, Kansas, Louisiana, Mississippi, Montana, North Carolina, North Dakota, and Oklahoma.

In those states, the commissioner answers directly to the public. Voters decide who will oversee the insurance market, approve rate increases, and manage industry compliance.

"If you live in one of those states," Susman said, "you have an insurance commissioner that's there because of you, the voting public. You put them there."

In the other 41 states, commissioners are

Captive vs. Independent Agents: Who's Really on Your Side?

In today's complex insurance marketplace, most people buy their coverage through an agent — but few truly understand the differences between the types of agents that exist.

Is your insurance representative working for you, or for the company? Are they free to shop around for the best deal, or are they limited to one carrier's options?

In a recent episode of Insurance Hour, host Karl Susman broke down the distinctions between captive, employee, and independent insurance agents — and revealed how each operates, what motivates them, and, most importantly, who they really serve.

What followed was a refreshingly candid discussion that stripped away marketing jargon to help consumers make more informed decisions.

The Three Faces of Insurance Representation

Susman explained that while the word agent is often used broadly, not all agents are the same. In fact, there are three main types:

1. Captive Agents — represent one insurance company exclusively.

2. Employee Agents — work directly as employees of a specific insurer.

3. Independent Agents or Brokers — represent multiple insurance companies and, by law, the consumer.

Each model has its own advantages, challenges, and implications for service and pricing.

1. Captive Agents: Loyal to One Carrier

The term "captive" might sound dramatic, but it's accurate: a captive agent is bound to a single insurer. They can sell policies only from that company and cannot offer competing products.

"You are captive by them," Susman explained. "If you're going to offer their product, they don't want you offering competing ones."

That exclusivity can actually work to the consumer's benefit in certain situations. Because captive agents deal with one insurer day in and day out, they tend to know that company's products, policies, and underwriting rules intimately.

The Pros:

• Product Expertise: Captive agents have deep knowledge of their company's offerings.

• Internal Relationships: They often develop close ties with underwriters, claims representatives, and support staff — which can help resolve ...

Insurance 101: How to Buy It, Why It Matters, and Proof That It Pays

When it comes to insurance, most people fall into one of two camps: those who see it as a necessary expense, and those who see it as a waste until disaster strikes. Yet the truth, as Karl Susman explains in a recent Insurance Hour episode, lies somewhere in between.

Insurance isn't just about protection — it's about understanding how, when, and from whom to buy it. And, perhaps most importantly, it's about knowing that when catastrophe does strike, the system actually works.

The Many Ways to Buy Insurance

Before diving into claims and payouts, Susman began with a fundamental question: How should you buy insurance?

There's no single answer, because consumers today have multiple pathways — each with its own advantages, limitations, and implications for service quality.

1. Through an Independent Broker

Independent brokers represent multiple insurance carriers, giving consumers access to a variety of options. They're licensed professionals who can tailor coverage to individual needs, shopping across different insurers to find the right balance between cost and protection.

"Brokers are like doctors," Susman explained. "You wouldn't just go get an x-ray yourself — you go to a doctor who knows what kind of x-ray you need. It's the same idea with insurance."

2. Through a Captive Agent

Captive agents sell for one specific company — think State Farm or Allstate. They understand that carrier's products deeply and can sometimes offer discounts or personalized service, but their range of options is limited.

3. Through a Direct-to-Consumer Channel

In recent decades, insurers have expanded their direct-to-consumer sales — allowing people to buy policies online, over the phone, or even through the mail.

Yes, the mail.

Susman shared that one of the earliest "direct" insurance models began through postal offers — customers received a quote, mailed back a check, and voilà, they were insured.

"The problem," he noted, "was that people often didn't realize what coverage they were actually getting — or how little of it they had."

Today's online systems are far more sophisticated, but Susman believes one thing hasn't changed: the gap between convenience and comprehension.

"Consumers who want to click a few buttons and buy online are a different type of buyer than someone who wants professional advice," he said. "Both models have their place — but if you want deep guidance, talk to a licensed broker or agent."

Why Talking to an Expert ...

Mastering the Insurance Claim Process: Practical Tips for Dealing with Adjusters

When disaster strikes — whether it's a fender bender, a burst pipe, or a house fire — insurance is supposed to step in and make you whole again. Yet for many policyholders, the claim process feels confusing, slow, and at times, downright frustrating.

Why does it seem like some claims go smoothly while others stall? Why do some adjusters seem compassionate and responsive, while others leave homeowners feeling ignored?

According to Karl Susman, insurance expert and host of Insurance Hour, much of the stress around insurance claims comes down to one critical — and often misunderstood — element: the claims adjuster.

In this insightful episode, Susman broke down what really happens behind the scenes during a claim, explained how to communicate effectively with adjusters, and offered practical steps for homeowners to take control of the process.

Why Understanding Adjusters Matters

When you file a claim, your insurer assigns a claims adjuster — the person responsible for investigating the loss, verifying coverage, and determining how much money you'll receive.

But as Susman reminds listeners, adjusters are not faceless bureaucrats or corporate villains.

"Claims adjusters are just people," he said. "They have good days and bad days. One adjuster's behavior doesn't define an entire company or the whole industry."

That simple truth is the foundation for navigating claims successfully. Adjusters operate under company policies and legal obligations, but human judgment still plays a big role in how a claim is handled.

"You can't take the experience of one claims adjuster and assume it represents how an entire insurer operates," Susman explained. "Every adjuster is different — and that's why how you communicate with them matters so much."

The Human Element of Insurance

Claims adjusting is a demanding job. Adjusters deal daily with people who have just experienced loss — homeowners whose roofs are gone, drivers whose cars are wrecked, families whose possessions are ruined.

As Susman put it:

"They're dealing with people who are emotional, upset, sometimes angry — and understandably so. It's not an easy job."

That doesn't mean you should excuse poor service or accept subpar treatment. But it helps to remember that empathy works both ways. When policyholders approach the claim process with calm professionalism rather than hostility, the results often improve dramatically.

"If you're frustrated," Susman said, "take a breath. Don't yell at your adjuster. They're not the enemy — they're the person who can help you."

When Things Go Wrong: It's Okay to Es ...