FOX 11 News IN DEPTH - Karl Susman Talks LA Wildfire Damage & Insurance Challenges Ahead
Published Date: 02/02/2025
California’s Wildfire Insurance Reality: What Every Homeowner Must Know
As flames continue to scorch the hills of Southern California, the devastation left behind is not only physical but financial. For thousands of residents, rebuilding after a wildfire isn’t just about clearing debris—it’s about navigating an insurance system under unprecedented stress. In a recent FOX 11 News In Depth discussion with host Hal Eisner, insurance expert Karl Susman offered a candid look into the challenges facing homeowners, renters, and insurers alike amid the ongoing crisis. His insights reveal the growing fragility of California’s property-insurance market and what consumers can do to protect themselves before disaster strikes again.
The New Reality of California Wildfires
Wildfires are nothing new in California, but Susman points out that the scale and frequency of recent fires are unlike anything the state has experienced before. “Normally there’s a fire, containment increases, and anxiety goes down,” he explained. “But this one just kept growing while containment stayed at zero.”
Insurers traditionally priced risk assuming a catastrophic wildfire might occur once every 100 years. Today, that “once-in-a-century” event happens every few years—a trend that’s breaking traditional actuarial models. Each new fire compounds the financial strain left by the last, leaving carriers wary of offering coverage at all. The domino effect is clear: higher premiums, widespread non-renewals, and an increasing number of homeowners forced into the state’s last-resort coverage, the California FAIR Plan.
Step 1: Don’t Lose Your Existing Policy
Susman’s first piece of advice is simple yet crucial: keep the policy you already have. In an unstable market, switching insurers can be risky.
“This is not the time to be shopping around,” he warned. “Make sure your policy is on auto-pay. Don’t let it lapse—even by accident.”
If a policy lapses or is non-renewed, getting coverage again may be nearly impossible. The California Department of Insurance (CDI) does temporarily prohibit non-renewals in zip codes directly affected by wildfire disasters, but homeowners must check their eligibility manually. Susman urges residents to visit insurance.ca.gov to confirm whether their property falls within those protected zones.
Filing a Claim: Speed Matters
For homeowners who have suffered losses, the most important step is to file a claim immediately. Many residents delay because they’re overwhelmed, but prompt filing triggers key consumer protections. California regulations require insurers to issue payments for additional living expenses (ALE) such as temporary lodging, food, and clothing within a defined time frame.
“People left their homes with nothing but the clothes on their backs,” Susman said. “They need money right away for lodging, food, even laptops to keep working.”
Encouragingly, Susman noted that many insurers have stepped up, issuing electronic fund transfers worth millions daily to help families rebuild. But for those waiting too long without updates, persistence pays: “Make a little noise,” he advises. “Follow up until the funds arrive.”
Renters Are Victims Too
The destruction doesn’t stop with homeowners. Thousands of renters in wildfire zones are also affected, losing possessions and housing security. Susman emphasized that renters’ insurance is equally critical, covering personal belongings and sometimes temporary relocation costs.
“All of those renters’ policies are total losses for the most part,” he said. “So policy limits are what people are going to be looking for and should expect to receive.”
Renters should file claims as quickly as homeowners. Even if a landlord’s property is insured, that coverage typically does not extend to tenants’ personal property.
Non-Renewals, Reinstatements, and Legal Gray Areas
A particularly painful issue arises when homeowners are non-renewed just before a wildfire hits. Some insurers, anticipating high losses, pull back coverage early in the season. Fortunately, CDI allows homeowners non-renewed within 90 days before a declared disaster to request reinstatement—if no damage has occurred.
“If your home hasn’t been destroyed and you’re within that 90-day window,” Susman said, “you can probably go to your carrier and they will reinstate your policy.”
However, once a property is lost, reinstatement is no longer possible. In those cases, uninsured homeowners must seek help from FEMA or the Small Business Administration (SBA) for federal disaster assistance.
Beware of Scammers
Tragically, major disasters also attract fraudsters. Susman warned of fake contractors and “claim-assist” callers preying on vulnerable victims desperate for help.
“People are being told, ‘Sign this contract now to get in line for rebuilding,’ or ‘Give me your information so I can file your claim.’ Then their identities are stolen.”
His rule of thumb: legitimate agencies will not cold-call, text, or demand upfront payment. Always verify through official government or insurer websites before sharing personal information or signing documents. When in doubt, review any contract with an attorney or licensed agent first.
The FAIR Plan: A Safety Net with Strings Attached
As more private insurers withdraw from California’s high-risk regions, thousands of homeowners turn to the California FAIR Plan, the state’s insurer of last resort. Funded collectively by all admitted insurance companies, the plan provides basic fire coverage to those unable to secure private insurance.
Susman acknowledges the program’s limits. “It’s not inexpensive, and it’s bare-bones coverage,” he said. “But it’s still fire insurance.” The FAIR Plan’s financial reserves alone cannot meet the scale of recent claims, but it has access to reinsurance, bonding authority, and assessments from participating insurers to ensure claims are paid.
Rising Rates and Market Adjustments Ahead
Even with the FAIR Plan safety net, the broader California insurance market is due for major adjustments. Susman predicts that property insurance will become more risk-based, with prices reflecting each property’s exposure level rather than statewide averages.
“People in higher-risk areas will pay more,” he said, “and those in lower-risk areas may actually see premiums drop.”
California’s paradox is striking: despite its exposure to wildfires and earthquakes, it still ranks among the least expensive states for property insurance. That imbalance, Susman argues, makes insurers’ business models unsustainable.
The Auto-Insurance Squeeze
Wildfires aren’t the only pressure point. Auto-insurance premiums are also climbing, driven by advanced vehicle technology, supply-chain delays, and repair-cost inflation. A minor fender bender that once cost $500 can now reach $5,000 because of embedded sensors, cameras, and computer calibration.
Susman’s tip: call your insurer or broker and ask for every available discount. If you now work remotely or drive less than before, update your vehicle-use information—insurers won’t automatically adjust rates in your favor. And never file small cosmetic claims that could raise your long-term premiums.
Hardening Homes and Building Smarter
To prevent future disasters, insurers and regulators are emphasizing
“home hardening”—making properties more fire-resistant through better materials and defensible-space practices.
Simple steps include:
- Replacing wood roofs with fire-resistant materials
- Clearing vegetation within 5 feet of the structure
- Installing ember-resistant vents and double-pane windows
Under new state rules, insurers must offer discounts to homeowners who complete approved mitigation efforts.
The Human Cost—and the Way Forward
Perhaps most poignant was Susman’s reflection on the emotional toll: “My wife and I have over 130 clients who’ve lost everything. We’re hearing them cry. It’s hard—very, very hard.”
The California wildfire crisis is not only reshaping the insurance industry—it’s redefining what “recovery” means. For homeowners and renters, understanding your coverage, keeping it current, and taking proactive steps to mitigate risk can make all the difference when catastrophe hits.
Key Takeaways
- Keep your policy active—don’t let it lapse.
- File claims immediately and follow up persistently.
- Beware of scams—verify all communications.
- Understand the FAIR Plan’s limits if you rely on it.
- Harden your home to reduce premiums and risk.
Wildfires may be an unavoidable part of California life, but with awareness and preparation, homeowners can navigate the flames with far greater resilience—and help ensure the insurance system itself survives the heat.
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