Franklin Wildfire - Insurance Expert Explains What Homeowners Need to Know During Malibu Wildfire

Published Date: 12/10/2024

When Fire Strikes: What the Franklin Wildfire Teaches Us About Insurance Preparedness

As flames swept across the hills of Malibu during the Franklin Fire, hundreds of California homeowners found themselves asking the same two questions: “Do I have enough insurance?” and “What happens now?”

For residents in fire-prone areas, these questions have become a grim seasonal ritual. And for the insurance industry — already in crisis — each new wildfire is another reminder of how fragile the system has become.

In a recent live interview, independent insurance expert Karl Susman offered both clarity and calm, breaking down what homeowners need to know when wildfires threaten their property. His message was practical, compassionate, and rooted in decades of real-world experience: safety first, preparation always, and knowledge is your best defense.

1. First Rule: Protect Yourself, Not Your Property

When asked what people in Malibu should do while waiting to see if their homes survive the flames, Susman didn’t hesitate.

“Please don’t go driving around in the fire area,” he warned. “Nothing is more important than protecting ourselves and staying safe. As much as our inclination is to protect our home and our stuff — it’s just stuff.”

It’s an emotional truth that’s easy to overlook in the panic of evacuation orders. Yet it’s essential. Your safety — and that of your family and pets — is the only truly irreplaceable asset.

Susman also reminded viewers that once a wildfire is active, insurers typically freeze policy activity. That means no new coverage can be added, no limits can be raised, and no new policies can be issued until the event ends.

So if you’re thinking of increasing coverage during a wildfire, you’ve already missed the window. The best move is to prepare in advance:

• Keep a digital copy of your policy stored online.
• Maintain a “go bag” with essentials — documents, IDs, photos, medications, chargers, and a flash drive of important files.
• Know your insurer’s emergency contact numbers.

Preparation turns panic into a plan — and in a crisis, that can make all the difference.

2. Evacuation Expenses: You May Already Be Covered

One of the most overlooked forms of coverage in a standard homeowners policy is “Loss of Use” or “Additional Living Expenses” (ALE). This provision can reimburse you for temporary housing, meals, and other costs if you’re forced to evacuate.

Susman emphasized that mandatory evacuation orders often trigger these benefits, even if your home isn’t physically damaged.

“If there’s an evacuation, check with your insurance company,” he advised. “Some policies will provide coverage if you have to leave.”

This means that hotel stays, rental costs, and even certain travel expenses might be reimbursable — but only if you understand and document them properly.

Key tip: Keep all receipts from the moment you leave your home. Your insurer will need them to process any ALE claim.

3. Santa Ana Winds: The Hidden Catalyst

Susman noted that the Franklin Fire — like many Southern California wildfires — was fueled by the Santa Ana winds, a recurring weather pattern that can transform a small spark into a regional disaster.

“Anytime the Santa Anas kick up, it’s fair game anywhere,” he explained. “If you live in an above-average fire risk area, always have your go bag ready.”

While Malibu was in the spotlight, he reminded viewers that many parts of Southern California face similar risks — from San Diego’s foothills to the Inland Empire.

Bottom line: The Santa Ana winds make every season fire season. Waiting for a red flag warning to check your coverage is waiting too long.

4. Insurance Market Impacts: No Surprise to the Industry

Viewers also wanted to know whether the Franklin Fire would worsen California’s already dire insurance crisis. Susman’s answer was straightforward — and surprisingly calm.

“This is the type of fire that’s been expected,” he said. “These areas are known to burn every five to seven years, and most of them are already insured through the California FAIR Plan.”

That’s the reality few homeowners realize: the state’s “insurer of last resort,” the California FAIR Plan, has become the primary insurer in much of high-risk California.

The FAIR Plan was designed decades ago for emergencies — but now it’s a mainstay, covering more than 350,000 homes. It provides basic fire protection, but not comprehensive homeowners coverage. That means no theft, water damage, or liability protection unless homeowners purchase a Difference in Conditions (DIC) policy separately.

For Malibu and other wildfire zones, that combination — FAIR + DIC — is now the standard path to full protection.

5. Why the Franklin Fire Won’t Crash the Market

Susman clarified that while the Franklin Fire is serious, it won’t cause a market collapse or mass insurer retreat.

“This won’t have a major impact on what the industry is already doing,” he explained. “Insurers already know these areas burn regularly — they’ve priced that risk in.”

The greater crisis is systemic, not event-driven. California’s insurance challenges stem from regulatory lag, not single fires. Proposition 103, the 1988 law that requires state approval for rate increases, ties insurer pricing to past loss data — ignoring modern wildfire dynamics and global reinsurance costs.

So while each fire adds pressure, it’s the regulatory framework, not the fire itself, that keeps insurers cautious or out of the market entirely.

6. Understanding Why Your Coverage May Be Limited

For homeowners watching the flames on TV, one question lingers: Why won’t my insurer cover me like they used to?

The answer lies in risk concentration. Many insurers, including State Farm, Allstate, and Farmers, have paused new policies or non-renewed existing ones in fire-prone ZIP codes.

This doesn’t mean your insurer is abandoning you personally — it means they’ve reached their risk tolerance threshold for that region. If they continue taking on policies without the ability to adjust rates, they risk insolvency — and that helps no one.

The FAIR Plan steps in to fill that gap, but it’s not a permanent solution. Reforming the system to allow insurers to properly price wildfire risk remains California’s only path to a sustainable market.

7. How Homeowners Can Protect Themselves Right Now

Susman outlined a few immediate, practical steps every California homeowner should take before the next wildfire breaks out:

✅ Review your coverage annually

Don’t assume your policy limits match current construction costs. Inflation and building code changes mean your home could cost 30–50% more to rebuild than your policy allows.

✅ Combine FAIR + DIC policies

If you’re in a high-risk area, this is the only way to ensure comprehensive protection.

✅ Document your belongings

Take photos or videos of every room and store them in the cloud. Keep digital copies of receipts for high-value items.

✅ Create defensible space

Maintain at least 100 feet of clearance between vegetation and structures, and use fire-resistant roofing and siding materials where possible.

✅ Ask about evacuation benefits

Know how to file a claim if forced to leave — and what proof your insurer requires for reimbursement.

8. The Emotional Reality of Insurance in the Fire Zone

The Franklin Fire highlights not just a financial problem, but a human one. California’s homeowners live under constant threat, balancing anxiety, rising premiums, and regulatory uncertainty.

Susman’s advice cuts through the noise: preparation and understanding are your best tools.

“Take the time to review your policy and talk to your broker,” he said. “Make sure you have what you need before you need it.”

It’s pragmatic wisdom born of experience — and a reminder that while fire risk is inevitable, financial devastation doesn’t have to be.

9. The Broader Lesson: Building a Smarter Insurance Future

The Franklin Fire serves as yet another wake-up call for policymakers. California must modernize its insurance regulations to reflect real-time risks. Allowing insurers to incorporate catastrophe modeling and reinsurance costs into rate filings would help stabilize the market and attract more carriers back into the state.

Until those changes take hold, homeowners in fire-prone regions will continue to rely on the FAIR Plan and the hope that reforms come before the next spark.

Final Thoughts

The Franklin Fire may not be California’s largest blaze, but it’s emblematic of a larger truth: wildfire is no longer an anomaly — it’s a constant.

Insurance can’t stop the flames, but it can prevent financial ruin. As Karl Susman reminded viewers, the difference between loss and recovery often comes down to foresight.

“Be ready. Have your go bag, your digital records, and your policy information in one place,” he said. “Because when the winds shift, it’s already too late to prepare.”

For California homeowners, that’s not alarmism — it’s reality. And understanding it might be the most valuable coverage of all.