Insurance Hour

Buying insurance can feel deceptively simple — until you realize just how many ways there are to do it. From online forms to local agents and independent brokers, the choices can be confusing. Each option comes with its own pros and cons, and making the wrong choice could mean overpaying, being underinsured, or having no advocate when you need help the most.

In a recent episode of Insurance Hour, host Karl Susman — a 30-year insurance veteran — broke down the three main ways to purchase insurance and what consumers should know before making that decision. His insights highlight the nuances of each path and remind us that the right choice isn't always the cheapest one, but the one that fits your situation best.

Susman begins with a simple framework: there are three primary methods of buying an insurance policy:

1. Buying directly from the insurance company

2. Working with a captive agent

3. Working with an independent broker

Each of these options can lead to the same end result — an active policy — but the experience, cost structure, and level of advocacy differ dramatically.

In the digital age, more consumers are going straight to insurers' websites or call centers to buy coverage. It's fast, convenient, and appeals to those who prefer handling their own finances. But, as Susman points out, "direct" doesn't always mean "better."

How it works:
You contact the insurance company directly — typically online or over the phone — to get a quote and purchase your policy. In the old days, Susman jokes, "you'd even get a quote form in the mail, fill it out, check a few boxes, send a check, and wait for the policy to come back." Those days are gone, but the idea remains the same: you're dealing one-on-one with the company itself.

Advantages:

• No middleman: You're dealing directly with the insurer, which can simplify communication and minimize misunderstandings.

• Speed: The process is usually fast and efficient, especially for standardized products like auto or renters insurance.

Disadvantages:

Today we welcome special guest Toni Lewis from Lewis Schoeplein Architects to the radio show to discuss how home construction costs and processes in California, particularly factors that affect insurance coverage needs. Toni provides an in-depth overview of construction costs, permitting requirements, building code regulations, timeline estimates, and 'soft costs' beyond just labor and materials. Key takeaways include how construction costs have risen drastically in recent years, with labor and material costs up 13-14% in 2021 alone. Current estimates are $400-600 per square foot for a basic single-family home. - Building in high-fire-risk areas adds requirements like fire-resistant materials and roofing that increase costs somewhat.- Permitting costs can be very high, with fees of $30,000+ for a 2000 sq ft home. Permits can take 6-8 months. Other 'soft costs' like architect fees, utilities, contingencies etc can add significantly to rebuild costs.  Timelines from design through permitting to completion can easily be 6-12 months for major work. Important factors for insurance policies to remember are that replacement cost estimates must account for the sharp rises in construction costs and coverage should include temporary living expenses for an extended rebuild period. The time required to rebuild after a loss can be much longer than many clients expect. 

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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]

California homeowners have always faced challenges when it comes to protecting their properties, but over the past few years, something dramatic has changed: the cost to rebuild or replace a home has skyrocketed.

In a recent episode of Insurance Hour, host Karl Susman sat down with architect Tony Lewis, principal of Lewis Shepplein Architects, to explore what's really driving these cost increases — and why many homeowners are underestimating how much it would take to rebuild after a loss.

What followed was an eye-opening conversation that revealed just how complicated and expensive home reconstruction has become, and why it's critical that insurance coverage keeps pace with these realities.

Lewis began with data that confirmed what many in the construction and insurance industries already suspect: building costs are up across the board.

California's official Construction Cost Index, which tracks labor and materials in Los Angeles and San Francisco, tells the story in numbers:

• Between 2011 and 2015, annual increases averaged just 1.75%.

• From 2016 to 2020, the average climbed modestly to 3.12%.

• Then came 2021, when costs surged a staggering 13.4% in a single year.

• In 2022, they rose another 9.3% — compounding on top of the previous year's spike.

To put that in perspective, the cumulative increase since 2020 has pushed California construction costs to nearly 9% above the national average, second only to Hawaii.

What caused this jump? Lewis points to a perfect storm of inflationary pressures:

• COVID-19 supply chain disruptions, which made basic materials like lumber and steel scarce and expensive.

• Labor shortages, as many skilled tradespeople left the workforce or shifted industries during the pandemic.

• Surging demand for home renovation and new construction as Californians spent more time at home and sought upgrades ...

California homeowners have always faced challenges when it comes to protecting their properties, but over the past few years, something dramatic has changed: the cost to rebuild or replace a home has skyrocketed.

In a recent episode of Insurance Hour, host Karl Susman sat down with architect Tony Lewis, principal of Lewis Shepplein Architects, to explore what's really driving these cost increases — and why many homeowners are underestimating how much it would take to rebuild after a loss.

What followed was an eye-opening conversation that revealed just how complicated and expensive home reconstruction has become, and why it's critical that insurance coverage keeps pace with these realities.

Lewis began with data that confirmed what many in the construction and insurance industries already suspect: building costs are up across the board.

California's official Construction Cost Index, which tracks labor and materials in Los Angeles and San Francisco, tells the story in numbers:

• Between 2011 and 2015, annual increases averaged just 1.75%.

• From 2016 to 2020, the average climbed modestly to 3.12%.

• Then came 2021, when costs surged a staggering 13.4% in a single year.

• In 2022, they rose another 9.3% — compounding on top of the previous year's spike.

To put that in perspective, the cumulative increase since 2020 has pushed California construction costs to nearly 9% above the national average, second only to Hawaii.

What caused this jump? Lewis points to a perfect storm of inflationary pressures:

• COVID-19 supply chain disruptions, which made basic materials like lumber and steel scarce and expensive.

• Labor shortages, as many skilled tradespeople left the workforce or shifted industries during the pandemic.

• Surging demand for home renovation and new construction as Californians spent more time at home and sought upgrades ...

California's insurance landscape is undergoing one of its most turbulent periods in decades. Insurers are leaving, rates are soaring, and policymakers are scrambling to find a path that balances market stability with consumer protection.

In a recent Insurance Hour broadcast, host Karl Susman unpacked the complex dynamics behind what many now call the California Insurance Crisis — a situation shaped by climate risk, outdated regulations, and fierce debate over proposed reforms from Insurance Commissioner Ricardo Lara.

This is more than an industry story. It's a defining test for how California — the world's fifth-largest economy — adapts its risk management systems to a new era of environmental and financial volatility.

Over the past several years, homeowners and business owners across California have faced a harsh reality: insurance is becoming harder to find and more expensive than ever.

According to Susman, more than 87% of insurers that once offered coverage in the state have either:

• Stopped writing new policies,

• Withdrawn entirely, or

• Restricted the types of risks they're willing to cover.

The result is a fragile marketplace defined by scarcity, limited competition, and skyrocketing premiums. Those who still manage to secure coverage often pay significantly more — not because of greed or negligence, but because the economics of insuring California's climate-driven risks no longer add up.

The root cause? A perfect storm of catastrophic wildfire losses, regulatory rigidity, and economic imbalance between risk exposure and rate approval.

To understand the current crisis, it helps to look back to 1988, when California voters passed Proposition 103.

This landmark legislation reshaped the state's insurance system in three major ways:

1. It required prior approval from the Department of Insurance (DOI) for any rate changes — meaning insurers couldn't raise premiums without state authorization.

2. It made the Insurance Commissioner an elected position, ensuring accountability to voters rather than political appointment.

   ...

Twice a year, Americans brace for that familiar disruption — the shift in time known as Daylight Saving Time (DST). Whether we "spring forward" or "fall back," the ritual often brings more groans than gratitude. People complain about lost sleep, sluggish mornings, and confused body clocks. But what many don't realize is that this simple one-hour adjustment also brings something else: higher insurance premiums.

In a fascinating episode of Insurance Hour, insurance expert Karl Susman dives into an overlooked consequence of our biannual clock change — how it affects car accidents, health emergencies, wildlife collisions, and ultimately, your insurance rates.

It turns out that the consequences of Daylight Saving Time are not just about feeling tired. They're measurable, costly, and have ripple effects across the insurance industry.

Before getting into insurance impacts, Susman poses a question that many of us have probably asked: Why do we even have Daylight Saving Time?

Contrary to popular belief, DST wasn't created for farmers — a common myth that persists to this day. Farmers, in fact, largely opposed it when it was introduced, because it disrupted their working routines. It also isn't primarily about saving energy, as modern studies have shown negligible (and sometimes negative) effects on energy usage.

The truth? Even experts can't seem to agree on a clear, consistent reason. The origins of Daylight Saving Time date back to World War I and II, when governments experimented with adjusting clocks to maximize daylight hours and conserve energy. But in the modern world of 24-hour commerce and artificial lighting, that logic simply doesn't hold up.

Yet, despite confusion and complaints, we continue to change our clocks — and pay for it, sometimes literally.

According to industry research cited by Susman, the single-hour shift from Daylight Saving Time results in a 7.6% increase in fatal car crashes during the week that follows the time change.

That's not just a minor fluctuation. It represents hundreds of preventable deaths every year, directly linked to sleep deprivation and circadian disruption. These accidents also lead to a surge in insurance claims — property damage, medical costs, liability expenses — all of which ripple through the system and eventually lead to higher premiums for everyone.

The connection is clear:

• More crashes → more claims.

• More claims → higher insurance costs.

Even if you personally drive safely, you're part of a shared risk pool. So when claims rise industry-wide, your rates can increase along with ev ...

When it comes to understanding insurance — what it covers, what it doesn't, and how it actually works — most people find themselves lost in a maze of terms, exclusions, and red tape. But for thousands of Californians, a familiar voice on the airwaves is helping cut through the confusion.

"I'm Karl Susman with The Insurance Hour on 96.9 FM and 1290 AM KZSB. Make sure to subscribe and listen up."

That simple on-air invitation from Karl Susman, founder of Susman Insurance Agency and host of The Insurance Hour, captures the spirit of a program that has quietly become one of the state's most valuable educational resources. It's more than just a talk show — it's a public classroom for one of the most misunderstood industries in America.

In a time when homeowners, drivers, and businesses are struggling to navigate an unstable market, The Insurance Hour provides what's been missing from the conversation: clarity.

Insurance isn't just about numbers and contracts; it's about people — and protection. Yet, for many, it feels inaccessible. The fine print can seem designed to confuse, not inform. That's the gap Karl Susman set out to bridge.

On The Insurance Hour, Karl breaks down complex topics into real-world conversations. Whether it's wildfire coverage, rate hikes, Proposition 103, or auto insurance reforms, his focus is always on education before sales.

"Insurance shouldn't be something you only think about after a loss," Susman says. "The best insurance policy is an informed one."

Each week, he and his guests — industry experts, policymakers, and consumer advocates — take listeners inside the mechanics of insurance: how rates are set, why markets fluctuate, and what consumers can do to protect themselves before disaster strikes.

California is facing a full-blown insurance crisis. Wildfires, inflation, and outdated regulations have collided to create a perfect storm. Major insurers like State Farm, Allstate, and Farmers have pulled back from writing new homeowners policies, leaving tens of thousands of residents scrambling for coverage.

Meanwhile, the state's last-resort FAIR Plan has ballooned far beyond its intended capacity, forcing homeowners to pay more for less coverage.

It's within this chaotic environment that The Insurance Hour has found its purpose.

Listeners aren't just tuning in for news — they're looking for guidance. They w ...

It's a sentiment many people quietly share but rarely say out loud: "I keep paying for life insurance, and the insurance companies seem to be the only ones winning." The short clip from Insurance Hour—featuring host Karl Susman's tongue-in-cheek remark, "Are you getting sick and tired of paying for life insurance only to see the insurance company making more and more money? Well, then just die."—was clearly meant as satire.

But behind the dark humor lies a valid question worth unpacking: how does life insurance really work, who benefits from it, and why does it seem like insurance companies always win?

In this post, we'll go beyond the punchline to explore the economics, psychology, and purpose of life insurance—why it exists, how it's priced, and what consumers can do to make sure they're not on the losing end of the equation.

Let's start with the uncomfortable truth: life insurance companies are designed to make money. They're not charities; they're businesses built on actuarial science and financial modeling that forecast risk across large populations.

Every time you pay a premium, you're essentially contributing to a shared pool. From that pool, insurers pay out death benefits to beneficiaries of policyholders who pass away while the policy is active. The goal for the insurer is simple—collect more in premiums and investment income than they pay out in claims.

That's not greed; it's risk management. Without that structure, the system wouldn't be sustainable. If every policyholder received back more than they paid in, the insurer would collapse. The "profit" is what allows insurers to continue paying out large sums when tragedy strikes.

Insurance operates on a mathematical principle called the law of large numbers. The larger the pool of insured individuals, the more predictable the overall mortality rate becomes.

In the case of life insurance, companies employ actuaries—specialists who analyze statistics about age, health, gender, lifestyle, and family history—to estimate how long policyholders are likely to live. From there, they price policies to balance the cost of risk versus expected return.

This means for every 100,000 policyholders who buy a 20-year term policy, the insurer knows, statistically, how many will pass away before the policy expires. The rest will outlive the term—meaning the insurer collects their premiums and pays nothing back.

That's why life insurance often feels like a losing bet. But it's not designed as an investment—it's designed as protection. You're not buying it because you plan to "win"; you're buying it so your loved ones don't "lose" if something happens to you.

California's insurance market is at a breaking point. Policies are being canceled, premiums are skyrocketing, and entire neighborhoods are finding it nearly impossible to secure coverage. On a recent episode of The Insurance Hour, host Karl Susman tackled this issue head-on, inspired by an open letter from several California legislators to Insurance Commissioner Ricardo Lara.

The letter — co-signed by Congressman John Garamendi and others — called attention to the "chaos" in the state's insurance market and urged the Commissioner to stabilize rates and require carriers to provide affordable coverage across all regions. But as Susman points out, while the letter identifies the problem, it doesn't present a solution.

And that, he argues, is where the conversation must begin: not just with complaints or political sound bites, but with practical, data-driven strategies to fix a system that's been straining for years.

Susman begins by cutting through the noise: "Insurance is not complicated," he says. "It's just math."

That may sound overly simple, but it's true. Insurance pricing is a mathematical balancing act — premiums must be high enough to cover claims and operating costs, but low enough to attract customers and comply with regulatory constraints. When either side of that equation falters, the system breaks down.

In California, the breakdown is severe. Over the past several years, carriers have withdrawn from writing new policies, citing unmanageable losses from wildfires, floods, and other extreme weather events. As of 2025, nearly 87% of insurers in the state have restricted or stopped writing new business altogether.

Why? Because the numbers don't add up. Between rising claim costs and outdated regulatory models, insurers can't charge rates that reflect actual risk — and they're unwilling (and often legally unable) to operate at a loss.

Susman summarizes it bluntly: "If you collect $1,000 and you pay out $1,200, at some point that game's going to run out."

Susman reminds listeners that California's crisis isn't occurring in isolation. The nation as a whole is experiencing a surge in weather-related losses.

As he explains, "Right now, there are 478,962 emergency responders working on 6,545 wildfires in California." Those fires, along with 25 separate billion-dollar weather disasters across the U.S. this year alone, have put unprecedented pressure on the insurance industry.

Extreme heat, record rainfall, tropical storms, and megafires are driving payouts higher than ever. Even states not traditionally prone to such risks — like Missouri, Kentucky, and Arizona — are seeing billion-dollar events.

"This isn't political," Susman says. "It's just math. The weather is creating significantly higher payouts that the insurance industry is ...

Title: How California Homeowners Can Save Up to 14.5% on Fire Insurance Through Wildfire Hardening

In recent years, wildfires have reshaped California's landscape — not just ecologically, but financially. As insurance carriers recalibrate their risk exposure, homeowners across the state have felt the impact through rising premiums and shrinking coverage options. Amid these challenges, the California FAIR Plan Association (CFPA) has introduced two new wildfire mitigation discounts that could help property owners reduce their fire insurance premiums by up to 14.5%.

On a recent episode of The Insurance Hour, host Karl Susman broke down what these discounts mean, how homeowners can qualify, and why "home hardening" has become a key term in modern insurance language. His explanation offers both a financial incentive and an educational roadmap for property owners looking to protect their homes — and their wallets.

Before diving into the specifics of the discounts, Susman introduces the concept of home hardening, sometimes called wildfire hardening. This term describes measures homeowners can take to make their property more resistant to wildfires — by using fire-resistant materials, clearing vegetation, and creating defensible space.

The insurance industry sees this as a partnership between insurers and homeowners. When properties are better protected, there are fewer and smaller claims — which helps stabilize the overall market. As Susman notes, "Not having fire damage is good for us. It's good for the insurance industry. And what's good for the insurance industry, meaning not paying a lot of claims, means we're going to end up with lower premiums."

In other words, home hardening isn't just about individual protection — it's part of a broader effort to balance risk and affordability in California's volatile insurance landscape.

The California FAIR Plan's new wildfire mitigation program offers two separate discounts that can combine to total 14.5% off the fire portion of your policy:

1. Wildfire Hardening – Protecting the Structure (10% Discount)

2. Wildfire Hardening – Protecting the Immediate Surroundings (5% Discount)

Let's unpack each one and what you need to do to qualify.

This discount focuses on the physical structure of your home — its roof, walls, windows, and other components that influence fire vulnerability. To qualify, your dwelling must meet