Insurance Hour

• Insurance and Email Misinformation: Setting the Record Straight on California's Coverage Crisis

  In today's fast-moving digital world, misinformation spreads faster than facts — especially when it comes to complex issues like insurance regulation. One leaked email, a few out-of-context headlines, and suddenly, public understanding of an already complicated market becomes even murkier.

  That's exactly what happened recently when internal communications between insurance industry representatives and California officials were selectively publicized — suggesting cozy relationships, backroom deals, and regulatory bias. But as KarlSusman, host of Insurance Hour and longtime advocate for consumer and industry transparency, explains, the truth is far more nuanced.

  The issue isn't corruption — it's communication. And when media narratives distort how insurance reforms are discussed, it becomes nearly impossible for Californians to understand what's really at stake in their state's insurance crisis.

  1. The Backdrop: A Market in Distress

  California's insurance system is in the midst of its most serious disruption in decades. Major insurers like State Farm, Allstate, and Farmers have restricted or paused new business. The state's FAIR Plan, designed as a last-resort safety net, has doubled its policy count since 2020.

  At the heart of the problem is Proposition 103, a 1988 law requiring insurers to get prior approval from the Department of Insurance before adjusting rates. What was once a consumer protection measure has become a regulatory bottleneck — preventing companies from responding to inflation, wildfire risk, and reinsurance costs in real time.

  As Susman points out, "Insurance companies aren't leaving California because they want to. They're leaving because the math no longer works."

  2. The Email Controversy: What Really Happened

  The controversy began when a series of emails between insurance industry representatives and the California Department of Insurance (CDI) surfaced. Media outlets framed the correspondence as evidence that regulators were working "too closely" with insurers during the rulemaking process.

  But according toSusman, these communications were routine and required by state law. Under California's Administrative Procedure Act, regulators are obligated to seek public and stakeholder input when developing or amending rules — including input from insurers, consumer advocates, and industry groups.

  "It wasn't collusion,"Susman clarified. "It was collaboration — the kind that ensures any new regulation is grounded in reality, not ideology."

  The so-called "leaked" emails were, in fact, publicly available documents on the state's website as part of the regulatory comment process. What made them seem secretive was how they wer ...

Buying insurance may seem like a straightforward task — go online, get a quote, pay the premium, and you're covered. But as Insurance Hour host Karl Susman reminded listeners in his episode "Comparison of Insurance Purchasing Options," the way you buy insurance can matter just as much as what you buy.

With over 30 years of industry experience, Susman walked through the three primary ways consumers can purchase coverage: directly from the insurance company, through a captive agent, or through an independent broker. Each path offers advantages — and hidden pitfalls — that can affect how well you're protected when it matters most.

This breakdown takes Susman's real-world insights and translates them into a practical guide for anyone navigating today's increasingly complex insurance landscape.

Susman began with the most straightforward option: purchasing insurance directly from the carrier.

In the past, this meant mailing in paper forms with a check enclosed — a process that now sounds quaint in the digital age. Today, buying direct usually involves calling the company's sales center or using its website.

• Fewer middlemen. You deal directly with the insurance company — no agents, no intermediaries.

• Immediate access. You can often get quotes, bind coverage, and make payments online 24/7.

• Transparency. There's no concern about an agent's bias or commission-driven recommendations.

But Susman cautioned that simplicity can come at a price: you lose your advocate.

"You don't have anybody that's there to look out for you," he explained. "If there's a claim and you're not happy with how it's being handled, it's just you and the insurance company — one on one."

That lack of representation becomes critical when disputes arise over coverage or claim handling. Without an agent or broker, consumers must navigate complex policy language and claims departments on their own.

Susman also debunked a common misconception — that buying direct automatically saves money.

"Ninety-nine point nine percent of the time," he said, "you're paying the same rate, whether you go directly to the company or through a broker."

Insurers file standard rates with regulators, meaning that price differences between distributi ...

California's property insurance market is in crisis. Homeowners from San Diego to Santa Rosa are discovering that their long-time carriers—State Farm, Allstate, Farmers, and others—are no longer writing new policies, while renewal premiums are skyrocketing.

For millions of Californians, the question isn't "How much will it cost?" but rather "Can I even find coverage at all?"

According to Karl Susman, insurance expert and host of The Insurance Hour, this crisis didn't appear overnight. It's the result of decades-old regulation, rising catastrophic risk, inflation, and structural flaws in how insurance companies are allowed to operate in California. Understanding how we got here is key to understanding where we're going—and what needs to change.

California is home to nearly 40 million residents, and more than half own their homes. That means roughly 20 million homeowners depend on property insurance to protect their single greatest investment.

But as Susman notes, this crisis doesn't just affect homeowners. It also touches:

• Renters

• Condominium owners

• Apartment buildings

• Homeowners associations

• Rental property owners

In short, nearly every form of property coverage in the state has been disrupted.

Three of California's largest insurance companies—State Farm, Allstate, and Farmers—have either paused writing new homeowners policies or capped how many they're willing to issue. Together, these three carriers hold roughly 21% of the state's homeowners insurance market, according to 2022 data.

"When a quarter of the market stops writing, that's not a slowdown—it's a system shock," Susman explains.

Their retreat has triggered what economists call a "flight to safety" across the rest of the market. Other insurers, worried about taking on higher-risk customers, have followed suit. This dynamic is known in the industry as adverse selection—and it's one of the invisible drivers of the crisis.

Adverse selection happens when only the riskiest customers remain in a market.

"If you're the only company still writing policies for high-risk homes," Susman says, "you'll get more bad risks than good ones. That's a recipe for losses."

W ...

Insurance is, at its core, a promise of protection—a social and economic innovation that shields individuals and businesses from unexpected loss. Yet behind that simple idea lies one of the most complex and enduring systems in human history.

From its ancient origins in Babylonian trade codes to today's AI-driven underwriting models, the story of insurance is also the story of human ingenuity: our determination to understand, share, and mitigate risk.

In this post, we'll trace the fascinating journey of the insurance industry—from its humble beginnings in London's coffeehouses to the digital transformation that defines the modern marketplace.

Long before modern policies or actuarial tables, societies were already experimenting with the idea of collective protection.

One of the earliest known examples comes from the Code of Hammurabi, written around 1750 BCE in ancient Babylon. Merchants who borrowed money to fund trade expeditions were promised debt forgiveness if their goods were lost at sea—a primitive but effective form of risk-sharing.

In ancient China, traders who transported goods along treacherous river routes would spread cargo across multiple ships, ensuring that no single loss would ruin them.

These early forms of risk distribution laid the groundwork for what would eventually become the global insurance industry.

The modern concept of insurance—contracts, premiums, and underwriters—took shape in 16th- and 17th-century England, when London emerged as the center of global maritime trade.

Ships carried valuable cargo across dangerous waters, facing storms, pirates, and uncertain markets. Merchants realized that sharing the financial risk of voyages could protect their investments and encourage trade.

Enter Edward Lloyd's Coffeehouse, founded in 1688.

Lloyd's became the meeting place for merchants, shipowners, and investors who exchanged information about shipping routes, weather conditions, and trade opportunities.

It was there that a revolutionary idea took root: individuals could "underwrite" voyages by writing their names under the amount of risk they were willing to take on—in exchange for a premium.

Thus was born the practice of underwriting and, eventually, Lloyd's of London

In today’s show  I provide an in-depth overview of the California FAIR Plan Association, which offers basic fire insurance coverage for California residents unable to obtain it through the private market. I clarify common misconceptions about the FAIR Plan, emphasizing that it is not a state-run insurer but rather an association of all admitted insurance companies in California. I explain the perils and coverage options included and excluded in a FAIR Plan policy, stressing the importance of also acquiring a DIC (Difference in Conditions) policy to supplement gaps in FAIR Plan coverage. Throughout the show, I take calls from listeners with insurance inquiries. These include a mother seeking advice on adding her teenage son to her auto policy upon getting his license and a homeowner who was dropped by his insurer inquiring about obtaining FAIR Plan coverage. I respond to these queries with detailed and tailored insurance advice.

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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.

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

If you live in California, chances are you've heard of the California FAIR Plan — often described as the "insurer of last resort." But what exactly is it? And how does it differ from traditional homeowners policies?

In a recent Insurance Hour broadcast, KarlSusman, independent broker and insurance expert witness, broke down the myths and realities surrounding the FAIR Plan — while also tackling another pressing issue for families: the rising cost and complexity of auto insurance.

This episode was classicSusman — equal parts education and empowerment — offering homeowners and drivers practical insights into how to stay covered and avoid costly mistakes.

One of Susman's first clarifications might surprise many:

"The California FAIR Plan isn't an insurer at all — it's an association," he explained.

The FAIR Plan (Fair Access to Insurance Requirements) was created in the late 1960s after a series of devastating urban riots and wildfires left thousands unable to obtain basic fire coverage. Rather than a state-run company, it's a joint association of all admitted insurance carriers in California.

Each insurer participates based on its market share — meaning if a company writes 10% of the homeowners business statewide, it's responsible for 10% of FAIR Plan premiums and claims.

So while the plan is administered centrally, it's actually backed by the collective strength of California's admitted insurance industry — not taxpayer funds.

And if a crisis pushes it beyond solvency, there's a backup system in place: the California Insurance Guarantee Association (CIGA). Since the FAIR Plan is part of this safety net, claims will still be honored even if the association runs out of funds.

"Effectively,"Susman noted, "you have all of the admitted insurance companies backing all of the admitted insurance companies."

At its core, the FAIR Plan provides basic fire insurance — protection for those who cannot obtain standard homeowners coverage.

But it covers more than most people realize. Reading directly from the policy,Susman outlined the included perils:

• Fire or lightning

• Smoke damage

When homeowners in California receive a dreaded non-renewal notice from their insurance company, one phrase often appears as their last resort: the California FAIR Plan.

It's a name that can sound intimidating—or even unfair—to those unfamiliar with it. But despite its reputation as a "last resort" option, the California FAIR Plan Association (CFPA) serves an essential purpose in the state's insurance system: ensuring that every property owner, no matter where they live, can obtain basic fire insurance coverage.

Insurance expert and radio host Karl Susman—who has written FAIR Plan policies for over 30 years—recently explained how it all works on The Insurance Hour. His insights shed light on what the FAIR Plan really is, how it came to be, and what homeowners need to understand before choosing this kind of coverage.

The California FAIR Plan was created more than 50 years ago, following the Watts Riots of 1965–1968, which exposed severe disparities in insurance availability. In many urban areas, insurers refused to write property coverage, leaving residents vulnerable and unprotected.

To address this, the California Legislature stepped in. Lawmakers mandated that all property owners must have access to essential property insurance, and from that directive, the California FAIR Plan was born.

The FAIR Plan is not a government agency—it's a nonprofit insurance association, funded collectively by all admitted insurance companies operating in California. Each insurer contributes to the FAIR Plan's pool based on its market share.

For example:

• If a carrier insures 10% of the homes in California,

• It must also contribute 10% of the FAIR Plan's premiums and claims.

In this sense, the FAIR Plan is a shared safety net, supported by the very insurers that can no longer cover high-risk properties themselves.

The FAIR Plan's primary mission is simple: to provide basic fire insurance coverage to properties that the private market won't insure.

That's why it's often referred to as the "insurer of last resort." It's where homeowners turn when every other carrier has said no.

But as Susman poin ...

If you've tried to buy or renew auto insurance in California lately, you've probably noticed something unusual — silence.

"You used to be able to pick up the phone or go online and get a quote from multiple companies," said insurance expert Karl Susman, host of The Insurance Hour. "Now, when you're calling around, what you might find is crickets."

That silence isn't from disinterest. Agents aren't ignoring customers. Carriers aren't being selective. They literally cannot take new business.

It's part of a larger, systemic problem that's left California drivers facing record-high premiums, limited options, and unanswered calls from once-bustling agencies. But Susman says there's light at the end of the tunnel — and it's closer than most people think.

For decades, California's auto insurance market was one of the most competitive in the country. Drivers could compare dozens of companies, shop around for the lowest premium, and often switch carriers in minutes.

That's no longer the case.

"Right now, if you're calling around and you can't get an auto insurance quote," Susman explained, "that means there is no competition. And if there's no competition, that means your rates are going to stay higher."

The reason? Many insurers are in a temporary freeze, pausing new policy sales while they await state approval for rate adjustments — the first major approvals in nearly three years.

California's insurance laws, largely shaped by Proposition 103, require companies to offer every consumer their best available rate — not whatever they choose to charge.

It's a consumer-friendly safeguard designed to ensure fairness. Every insurer must file their pricing structure with the California Department of Insurance (CDI) and get approval before using it.

"An insurance company can't just willy-nilly decide what they're going to charge without permission from the State Department of Insurance first," Susman noted.

That oversight prevents arbitrary pricing — but it also slows adaptation when market conditions change rapidly, as they have in recent years.

The short answer: math.

When the cost of claims exceeds the premium collected, insurers lose money. For California carriers, that imbalance ...

When you live in California, earthquakes are not a matter of if—they're a matter of when. The Golden State sits atop some of the most seismically active fault lines in the world, and residents feel tremors so often that they can seem routine. Yet, when it comes to protecting property from these natural events, many Californians remain uncertain about whether earthquake insurance is worth the cost—or if FEMA will step in to cover the damage when disaster strikes.

In a recent episode of Insurance Hour, industry expert Karl Susman breaks down the myths, facts, and financial realities behind earthquake insurance and government aid. His insights shed light on one of the most misunderstood aspects of California homeownership: how to prepare—financially and emotionally—for the next big quake.

One of the first questions Susman says he's asked regularly is simple yet telling:

"Should I buy earthquake insurance?"

This is quickly followed by an equally common but less logical one:

"Do most people buy it?"

That second question reveals a lot about how people make insurance decisions—not always based on risk, but on social proof. Many homeowners gauge their need for earthquake insurance based on what their neighbors or peers are doing, rather than their personal exposure or financial situation.

But as Susman points out, how many other people buy a policy doesn't change your personal level of risk. Just because your neighbor opts out of earthquake insurance doesn't mean your home will somehow be spared from damage. Insurance is—and always should be—a deeply personal risk management decision.

It's easy to think of "the big one" as a once-in-a-century catastrophe, but in reality, earthquakes of varying magnitudes occur daily throughout California. Most are small enough to go unnoticed, but medium and strong quakes happen regularly, and they can cause significant damage even hundreds of miles from the epicenter.

The Northridge earthquake of 1994 remains one of the most infamous examples. It caused billions of dollars in damage, destroyed freeways, and displaced tens of thousands of residents. What's more, the financial fallout revealed a harsh truth: the majority of homeowners lacked earthquake insurance. Those without coverage had to rely on limited federal aid—and many learned the hard way that FEMA assistance is not the safety net they thought it was.

After every major natural disaster, stories circulate of the Federal Emergency Management Agency (FEMA) swooping in to "cover" the damages for uninsured homeowners. According to Susman, this belief is one of the biggest misconceptions in the insurance world.

Here' ...

Title: The Turbulent State of Insurance: Insights from Karl Susman on Market Shifts, Affordability, and the Path Forward

In the constantly evolving landscape of insurance, few voices carry the experience and balance of insight that Karl Susman brings to the conversation. As a seasoned insurance broker and radio host, Susman operates at the critical intersection between insurance carriers and consumers — a space where financial realities, risk management, and human needs collide.

His observations shed light on one of the most pressing challenges in the insurance industry today: the widening gap between what insurers can sustainably offer and what consumers can realistically afford. This isn't just a matter of company policy or consumer preference — as Susman puts it, "This really isn't politics. This is really just math."

That statement captures the essence of the insurance dilemma facing millions across the country. Behind every policy, premium, and claim is a careful calculation — a formula balancing risk exposure, claim costs, market competition, and regulatory oversight. When one side of that equation shifts dramatically, the entire market feels the strain. And according to Susman, that's exactly what's happening today.

One of the clearest examples of this strain lies in the auto insurance sector. Susman notes that insurers are increasingly hesitant to write new business — a troubling sign for both drivers and brokers. "They literally say, 'Don't write, please,'" he explains, describing the restrictions many carriers have placed on agents.

Several factors contribute to this phenomenon. Rising repair costs, elevated accident rates, and what Susman calls "increasingly bad driver behavior" have combined to create a perfect storm for insurers. Each claim costs more to resolve, each risk feels more volatile, and the margin for profit narrows.

From an insurer's perspective, these rising losses make it difficult to justify taking on additional risk — especially in states like California, where rate adjustments are subject to lengthy approval processes and strict regulatory oversight. As a result, some carriers are tightening underwriting standards, withdrawing from certain markets, or even ceasing new business altogether.

For consumers, this translates into fewer options and higher prices. Some companies may demand full payment upfront instead of offering monthly plans, while others may simply refuse to insure higher-risk drivers. The outcome is a shrinking pool of affordable coverage — a situation that leaves both customers and brokers like Susman in a bind.

While the auto insurance situation is troubling, the homeowners market is in even deeper distress. According to Susman, homeowners are now "lucky to find adequate and affordable coverage." When shopping for quotes, he sometimes finds only one or two options — or none at all.

The reasons for this are multifaceted. The escalating frequency and severity of natural disasters — from wildfires and floods to hurricanes — have driven property claims to unprecedented levels. Insurers, facing billion-dollar losses, are reassessing their exposure and withdrawing from high-risk areas.

This retreat has created a scarcity of available p ...