When it comes to insurance, most people fall into one of two camps: those who see it as a necessary expense, and those who view it as a waste until disaster strikes. As Insurance Hour host Karl Susman explains, the truth sits somewhere in between.
Insurance isn’t just about protection. It’s about understanding how, when, and from whom to buy it—and knowing that when catastrophe does strike, the system is designed to work. In this episode, Susman broke down the different ways consumers buy insurance, addressed the myth that insurers don’t pay claims, and explained why informed buyers are always better protected.
The Different Ways Consumers Buy Insurance
Susman began with a fundamental question: how should you buy insurance? Today’s consumers have more purchasing options than ever, each with distinct advantages and limitations.
Independent brokers represent multiple carriers and shop the market on your behalf. They tailor coverage to individual needs and provide guidance across different insurers. As Susman put it, “Brokers are like doctors—you don’t diagnose yourself, you go to someone who knows what you need.”
Captive agents, by contrast, sell for just one carrier, such as State Farm or Allstate. They know their company’s products deeply and can offer consistency and brand-based discounts, but their options are limited to one insurer.
Direct-to-consumer channels allow buyers to purchase coverage online, by phone, or even through the mail. While convenient, this method often leaves buyers without guidance. Susman noted that even today’s advanced online systems can’t always replace professional advice. Convenience is high, but comprehension can be low.
Why Professional Guidance Still Matters
Insurance has always been complex, and it continues to grow more complicated with climate risks, exclusions, and evolving regulations. Licensed agents and brokers spend years learning the nuances of coverage, endorsements, and claim procedures.
“Agents and brokers are licensed for a reason,” Susman said. “They understand the details most people don’t—and that can save you thousands later.”
Online platforms are useful for quick quotes and renewals, but they can’t always explain why one policy is better suited to your risk profile than another. Susman compared insurance buying to medical care: you can research symptoms online, but you still go to a doctor for diagnosis and treatment.
Do Insurance Companies Really Pay Claims?
One of the biggest myths in insurance is that companies don’t pay claims. Susman addressed that misconception directly.
“Do insurance companies pay claims? Yes—every day. On everything from fender benders to billion-dollar disasters.”
He pointed to massive historical payouts as proof that the system works when it’s needed most. Events like the 9/11 attacks, Hurricane Katrina, Hurricane Sandy, the Northridge Earthquake, California’s 2017–2018 wildfires, and the COVID-19 pandemic triggered tens or even hundreds of billions of dollars in insurance payments worldwide.
“These aren’t just a few checks,” Susman said. “That’s an entire industry mobilizing to help economies recover.”
While claims can sometimes move slower than policyholders would like, the financial record shows that insurance consistently fulfills its core promise.
The Everyday Claims That Keep Families Afloat
While catastrophic events dominate headlines, most insurance claims are far more routine—and just as important to the families affected.
Auto accidents, house fires, burst pipes, theft, and liability claims account for the majority of interactions consumers have with insurers. These everyday claims are what keep people financially stable after unexpected loss.
“It’s easy to focus on the big disasters,” Susman said, “but it’s the small claims that keep families afloat and lives moving forward.”
Insurance remains the backbone of personal financial resilience, whether the loss is a totaled vehicle or a damaged home.
How to Buy Insurance Smart as a Consumer
Susman offered practical guidance for navigating today’s crowded insurance marketplace:
Know what you’re buying. Policies differ widely in exclusions, limits, and endorsements. Never assume all policies are the same.
Work with a licensed professional. A good agent or broker does more than sell coverage—they advocate for you when a claim happens.
Compare apples to apples. Two policies with the same price can provide vastly different protection.
Keep records. Documentation of communications, receipts, and upgrades speeds up claims and avoids disputes.
Understand the value of service. Cheap insurance isn’t always better. The true value of a policy shows itself after a loss.
“You don’t want to find out the difference between good insurance and cheap insurance after the loss,” Susman warned.
Insurance as a Social and Economic Safety Net
Beyond individual protection, insurance plays a critical role in the broader economy. It allows businesses to reopen after disasters, keeps employees on payroll, and stabilizes communities after catastrophic events.
“Without insurance, you’d have no rebuilding, no recovery, no resilience,” Susman said. “It’s not just personal—it’s societal.”
Private insurance payouts after wildfires, hurricanes, and earthquakes often exceed federal aid and reach affected communities faster. Despite public criticism, the insurance industry remains one of the few systems capable of distributing massive financial relief efficiently.
Why This Matters Now
Across California and the U.S., the insurance industry is under intense pressure from rising catastrophe losses, stricter regulations, and escalating reinsurance costs. These forces are testing both affordability and availability.
Still, Susman remains confident in the industry’s ability to adapt.
“Insurance companies aren’t villains,” he said. “They’re trying to balance risk with reality. The key is making sure the system stays sustainable—for them and for us.”
That sustainability depends heavily on informed consumers who understand not just what they buy, but why.
Final Thoughts: Insurance Works When You Work With It
Susman closed the episode with a clear message: insurance is complicated, but it isn’t mysterious.
“The more you know,” he said, “the better protected you are.”
Consumers who engage with their policies, ask questions, keep records, and build relationships with licensed professionals consistently fare better when losses occur.
History—from 9/11 to California’s wildfires—proves the system works when it’s used and understood properly.
Insurance pays.
Insurance protects.
Insurance matters.
And as Susman reminds his listeners, the goal of Insurance Hour is simple: to help people understand not just what to buy, but why it matters.
