Insurance Hour

If you've noticed your car insurance premium climbing higher every renewal cycle, you're not alone. Across the U.S.—and particularly in California—drivers are watching their auto insurance costs rise, even when their cars are getting older and their driving records cleaner.

So why do premiums keep going up? And more importantly, what can you do about it?

Insurance expert and radio host Karl Susman, from Insurance Hour, recently broke down this topic in detail—explaining not only why rates are increasing, but also how drivers can take control of their insurance costs without sacrificing protection.

Here's a breakdown of his insights and actionable steps every policyholder should know.

At first glance, it doesn't make sense. Your car is getting older and worth less. You've been driving for years without accidents. Shouldn't your rate be going down?

Technically, parts of it are.

According to Susman, "If you actually look at your insurance policy line by line, the premium for your specific vehicle likely has gone down over time." That's because your car's value depreciates, reducing the insurer's potential payout in case of a total loss.

However, the total premium—what you pay overall—reflects far more than just the value of your vehicle. It's affected by a web of factors, including:

• Inflation: Rising costs of parts, labor, and repairs.

• Vehicle technology: Advanced electronics and sensors make modern cars more expensive to fix.

• Driving trends: Bigger, faster vehicles cause more costly damage in crashes.

• Accident frequency: Distracted driving has dramatically increased collision rates.

• Medical expenses: Injury claims are costlier now than ever.

And then there's the elephant in the garage—electric vehicles (EVs).

While EVs are environmentally friendly, they're notoriously expensive to repair. "Fixing an EV can cost 20, 30, even 40% more than repairing a gas-powered car," Susman explained. "That drives up costs across the board."

In short, even if your individual risk decreases, the system-wide cost of claims keeps pushing premiums higher for everyone.

Homeowners across California are discovering a new twist in their insurance renewal process — one that's taking place hundreds of feet above their homes.

In a recent CBS 8 (KFMB San Diego) report, anchor Marcella Lee and reporter Shannon Handy revealed that major insurers are now using drones and satellite imagery to inspect properties before deciding whether to renew, cancel, or adjust coverage.

It's part of a growing trend reshaping how insurers manage risk in a state already struggling through an insurance availability crisis.

"The practice of looking at homes and properties before renewal isn't new," insurance expert Karl Susman explained. "What's new is the way they're doing it — and it feels a little bit creepy."

In the past, homeowners might see a field inspector visit their property once every few years, clipboard in hand, snapping photos of the roof and yard. Those days are over.

Now, insurers are increasingly relying on aerial imagery, collected via drones, planes, and high-resolution satellites, to assess risk automatically — and sometimes, to justify non-renewals or premium increases.

"In San Diego, companies are now using drones and other technology to survey your property before deciding whether to insure it or not," Handy reported.

The change reflects a wider industry pivot toward AI-driven underwriting and remote inspections — technologies once used only for catastrophe modeling or claims verification that are now applied to everyday renewals.

For many homeowners, the idea that insurers are quietly capturing drone or satellite photos of their property can feel invasive.

"It's just the idea — it feels a little awkward, a little weird, a little strange to not know when it's happening," Susman admitted.

That discomfort isn't unfounded. The technology allows insurers to detect details homeowners may never notice — things like a missing roof tile, an overgrown tree branch, or debris in the yard — and flag them as potential hazards.

In one reported case, a CBS 8 employee received a notice that satellite images showed moss on their roof, with a warning that their policy could be canceled if the issue wasn't fixed.

Another homeowner said drone imagery captured a drained swimming pool, which was later cited as a maintenance issue during renewal review.

When the Little Hoover Commission convened its April 2024 hearing on California's home insurance crisis, lawmakers, regulators, and industry experts came together to dissect the state's collapsing market. Insurance carriers are retreating, homeowners are being forced into the FAIR Plan, and the cost of rebuilding after wildfires continues to climb.

But amid all the charts, rate filings, and regulatory debates, Karl Susman, an insurance broker and educator with more than three decades in the field, brought a crucial perspective: the crisis isn't just about regulation — it's about education.

"Consumers don't know what their insurance actually does," Susman said.
"And that's a bigger problem than the rates themselves."

California's home insurance market has been described as "broken" for years. Companies like State Farm, Allstate, and Farmers have limited new policies or exited entire ZIP codes, especially in high wildfire-risk areas.

The root causes are familiar:

• Rising catastrophe losses from climate-fueled wildfires.

• An outdated regulatory system (Proposition 103) that restricts forward-looking rate tools like catastrophe modeling.

• High rebuilding costs, driven by inflation and supply chain disruptions.

But Susman pointed out something often missing from the conversation: even if regulations are modernized, many Californians will still struggle — not because of what the law says, but because they don't understand how insurance actually works.

"We can fix rates, fix the FAIR Plan, fix reinsurance rules," he told commissioners,
"but if the average homeowner still doesn't understand their policy, they're going to make bad decisions."

Susman shared that in his experience, most homeowners don't read their policies — and those who do rarely understand them. Terms like "replacement cost," "actual cash value," and "exclusionary endorsements" sound technical but can make or break a claim.

He cited examples of homeowners discovering too late that their policy:

• Didn' ...

California's insurance market is undergoing a seismic transformation. As wildfires, floods, and other climate-related disasters grow more destructive, the state's long-standing approach to regulating insurance — rooted in 1980s-era policies — is being pushed to its limits.

In April 2024, the California Department of Insurance held a workshop on catastrophe modeling, a process that uses artificial intelligence, climate science, and data analytics to project future disaster risks. For the first time, state regulators and insurers discussed formally incorporating these tools into how home insurance rates are calculated.

Insurance industry expert Karl Susman, who testified at the workshop and later joined Spectrum News 1 for a detailed interview, helped clarify what catastrophe modeling really is — and what it means for consumers, regulators, and insurers. His insights reveal both the promise and the controversy behind this major policy shift.

Two more insurance carriers exited California in the week leading up to the Department of Insurance workshop — the latest in a string of withdrawals by major insurers like State Farm, Allstate, and Farmers. The reasons are familiar: rising wildfire losses, regulatory restrictions, and an inability to charge premiums that accurately reflect modern risk.

As Susman explained, "Many of the companies still writing policies in California are raising their prices and premiums." Those who remain are struggling under a system that, until now, has prevented the use of forward-looking data to model catastrophe exposure.

Unlike nearly every other state in the U.S., California law still forbids insurers from using catastrophe modeling to determine rates. They must base pricing on historical loss data — a method that increasingly fails to capture the reality of climate-driven disasters.

Catastrophe modeling seeks to correct this by allowing insurers to account for current and future conditions, such as worsening droughts, heat waves, and wildfire risks.

Despite the technical name, catastrophe modeling — or "cat modeling" — is not new. "It's something that's been utilized across the world for years," Susman said. "It's used in insurance underwriting and rating in literally every state except for California."

At its core, catastrophe modeling merges science, engineering, statistics, and computer technology to predict the likelihood and potential cost of large-scale disasters.

Susman described it as a way to help both insurers and consumers "work more granularly to find out what their exact risk looks like." Rather than simply relying on regional averages, cat models evaluate specific factors such as:

• Local vegetation, terrain, and proximity to fire-prone zones

• Build ...

When a homeowner in California opens their mail today, they might find one of three things: a non-renewal notice, a sharp rate increase, or a referral to the FAIR Plan. For years, insurers have been retreating from the state, citing wildfire losses, outdated regulations, and growing catastrophe risk.

But behind the headlines, a quiet revolution in insurance science is emerging — one that could change how California prices risk and rebuilds trust between consumers, insurers, and regulators. That revolution is called catastrophe modeling.

During an April 2024 Department of Insurance workshop, insurance expert Karl Susman delivered a clear and powerful message:

"It's time for California to follow the data — not the fear."

His comments underscored both the urgency and the opportunity in embracing catastrophe models for rate-making. To understand why, we first need to unpack what catastrophe modeling is, what it isn't, and how it could reshape the state's insurance landscape.

At its core, catastrophe (cat) modeling is a scientific way to predict losses from natural disasters like wildfires, earthquakes, floods, or hurricanes. It uses complex computer simulations that factor in:

• The probability of an event (like a wildfire igniting),

• The intensity of that event (how large or destructive it becomes),

• The exposure at risk (homes, businesses, infrastructure),

• And the vulnerability of those assets (materials, location, fire mitigation).

By combining all these variables, models estimate potential losses — not just for one property, but across millions of possible scenarios.

As Susman explained, this isn't "guesswork" or "AI magic." It's the same modeling that reinsurers, the global capital markets, and most other U.S. states already rely on to set fair and realistic rates.

"Catastrophe modeling isn't a black box," he said. "It's a transparent, data-driven system that can make insurance both more available and more affordable if used correctly."

California stands apart from every other state in one major way: its Proposition 103-era rate approval process. Enacted in 19 ...

For decades, the insurance industry has been defined by caution, paperwork, and delay. From claim checks that take weeks to arrive to billing systems that make agents pull their hair out, one of America's most essential industries has also been one of its slowest to innovate.

But that's beginning to change.

Enter Cody Eddings, co-founder and CEO of SnapRefund, a Philadelphia-based FinTech–InsurTech hybrid that's tackling one of the least glamorous—but most critical—challenges in the insurance world: payments.

From simplifying agency billing to helping insurers pay claims in minutes instead of weeks, SnapRefund is quietly reshaping how money moves through the entire insurance ecosystem. And in doing so, it's helping rebuild trust between carriers, brokers, and consumers.

The idea for SnapRefund didn't begin in insurance at all. In 2019, Eddings and co-founder Anis Taylor set out to build a peer-to-peer payment app focused on improving financial literacy in underserved communities.

They envisioned an app that rewarded users for learning about personal finance—earning tokens that could be redeemed for high-value resale items like PlayStations, sneakers, or tech gadgets. The goal was social impact: empowering people to make smarter financial choices through interactive learning.

But the reality of building a payments app from scratch soon hit hard. Competing with giants like Venmo, PayPal, and Zelle proved impossible without massive banking access and scale.

"We realized quickly that while the mission was great, the business model wasn't sustainable," Eddings told Insurance Hour's host Karl Susman. "We were paying dozens of cents per transaction while the big players were paying fractions of a cent."

That realization forced a pivot—a hallmark of every resilient startup story.

While exploring other use cases for their instant payment technology, Eddings and Taylor noticed something startling: despite advances in digital finance, nearly 70% of all insurance claims in the U.S. were still paid by paper check.

Think about that. In a world where consumers can send money instantly between smartphones, an insurance company—handling some of life's most urgent financial events—was still printing, mailing, and waiting for checks to clear.

"When someone needs money for a claim payment," Eddings said, "that's a really sensitive time. They might be displaced from their home. They might not h ...

The episode primarily focuses on insurance-related challenges in California, featuring Karl Susman as the host and Michael Soller, Deputy Insurance Commissioner, as the guest. The discussion highlights the current state of the insurance market in California, particularly addressing the non-renewal of policies by major providers like State Farm, and the broader impact on consumers. They delve into the role of the California Department of Insurance, initiatives to stabilize the market, and efforts to enhance consumer protections and understanding. The challenges faced by the California FAIR Plan, which provides last-resort insurance, are also explored.

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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]

As California's property insurance market continues to reel from company withdrawals, policy non-renewals, and skyrocketing premiums, the question on every homeowner's mind remains: Is there a plan to fix this?

In a recent episode of The Insurance Hour, host Karl Susman sat down with Michael Soller, Deputy Insurance Commissioner for Communications at the California Department of Insurance (CDI), for a rare and candid conversation about what's really happening — and what the Department is doing to stabilize the system.

From State Farm's non-renewals to the rise of the FAIR Plan, from public frustration to policy reform, the interview painted one of the clearest pictures yet of California's insurance crossroads.

Soller began with the basics — a reminder that California's Department of Insurance serves a dual mission: protect consumers and maintain a stable, available insurance market.

"We're the largest insurance market in the country," Soller said. "That makes us the fourth largest in the world. Our goal is to make insurance as available as possible and keep rates as low as possible, given the risks we face in this state."

The Department oversees 8.7 million residential policies, ensuring not only that rates are justified, but also that claims are paid fairly — whether from wildfires, floods, or everyday household losses.

That oversight, Soller noted, includes working with brokers and agents to help consumers navigate disputes and find solutions when coverage options are limited.

When State Farm — California's largest property insurer — announced in 2024 that it would non-renew 30,000 residential and 42,000 commercial policies, the news sent shockwaves across the industry.

Soon after, credit rating agency A.M. Best downgraded State Farm's financial rating from A to B, citing concerns over solvency and underwriting losses.

Soller confirmed that the Department immediately launched a coordinated review.

"Their decision to non-renew less than a year after they paused new policies raises serious questions for us as the regulator," Soller said. "We're working with State Farm's home state of Illinois to get a full picture of their financial condition and their plan for improvement."

Despite public alarm, Soller reassured policyholders that State Farm rem ...

California's homeowners insurance crisis has reached San Diego County. According to CBS 8 (KFMB), State Farm, the state's largest insurer, will discontinue homeowner coverage in 50 ZIP codes across the region, beginning this summer.

The company's decision is part of a statewide withdrawal that will see more than 30,000 homeowners lose coverage — a move State Farm attributes to inflation, regulatory barriers, and rising catastrophe risk.

But for many San Diego residents, this isn't just a numbers story — it's a shock to the system. Communities like Rancho Santa Fe, Jamul, Tierra Santa, Lakeside, El Cajon, and Mission Valley are seeing the steepest fallout, and the replacement costs are staggering.

"It's definitely a difficult time right now," said Karl Susman, insurance industry expert and principal at Susman Insurance Agency. "It's about as bad as it's ever been in my 30-plus years doing this."

Earlier in the week, State Farm filed data with the California Department of Insurance identifying the ZIP codes targeted for non-renewal.

Across San Diego County, the affected areas include:

• Rancho Santa Fe (92067, 92091): The hardest hit — roughly half of all State Farm policies are being dropped.

• Jamul and Lakeside (91935, 92040): Mountainous and brush-heavy regions where wildfire risk is high.

• Tierra Santa and Mission Valley (92124, 92108): Densely populated neighborhoods affected by both fire and flood risk.

• El Cajon (92019, 92021): Eastern inland zones where heat and wind exposure amplify loss potential.

In total, 50 ZIP codes in the county will see widespread non-renewals, part of State Farm's broader 30,000-policy statewide reduction.

For homeowners in those areas, non-renewal notices have already begun landing in mailboxes.

"I had a client reach out, and he's getting a cancellation in July," said ...

The insurance crisis in California continues to deepen. This April, CBS KPIX San Francisco reported that State Farm, the state's largest home insurer, is non-renewing more than 30,000 homeowner policies statewide, with some of the hardest-hit communities located right in the Bay Area's hillsides and foothills.

For homeowners in Contra Costa, Sonoma, and Santa Cruz counties, the move is more than a business decision — it's a turning point in California's growing struggle to maintain an insurable housing market amid escalating wildfire risk.

"The changes are coming faster than the very fire everyone's worried about," noted KPIX reporter John Ramos.

Ramos began his report in Diablo, a small township near Danville at the base of Mount Diablo — an area known for its scenic oak-covered hills and multimillion-dollar homes.

"This quiet neighborhood at the foot of Mount Diablo is one of many that is about to get a rude awakening about the state of homeowners insurance in California," Ramos said.

When homeowner Ron Agazzarian purchased his property, he assumed his existing State Farm policy would simply transfer. Instead, he was told the company wouldn't insure his new home because it was located in a high wildfire-risk zone.

"We thought we would just roll over our policy," Agazzarian said. "They told us they wouldn't insure out here."

His experience is emblematic of a broader shift: insurers are drawing new red lines around regions once considered safely suburban, now reclassified as fire-prone due to changing climate conditions.

According to data filed with the California Department of Insurance, State Farm's latest round of non-renewals includes:

• Diablo (94528): Over 50% of the 152 policies will not be renewed.

• Santa Cruz Mountains: More than 65% of policies in some ZIP codes will end.

• Santa Rosa area: Nearly 48% of local policies will be dropped.

• Orinda (Contra ...