Insurance Insights: Navigating Coverage Queries with Karl Susman

Published Date: 02/06/2024

Insurance Insights: Navigating Coverage Questions in an Uncertain Market

Insurance used to be simple: you paid a premium, filed a claim if disaster struck, and trusted your carrier to deliver on its promise. But in today’s volatile market—marked by wildfires, floods, inflation, and mass non-renewals—understanding what’s covered (and what’s not) has become increasingly complicated.

In a recent segment of Insurance Hour, host Karl Susman tackled one of the most common frustrations facing consumers today: how to make sense of their insurance coverage when the rules, rates, and risks seem to change overnight. From homeowners and auto policies to life and renters coverage, Susman’s insights offered clarity on how consumers can ask the right questions—and get real answers—before it’s too late.

The Coverage Confusion Crisis

The insurance industry has long battled a communication problem. Policies are written in dense, technical language. Exclusions hide in the fine print. Renewal notices come with rate increases but little explanation.

As Susman explains, “People think they know what’s in their policy—until something happens. Then they realize what they thought they had and what they actually have are two very different things.”

California’s ongoing insurance crisis has amplified this disconnect. Major carriers like State Farm, Allstate, and Farmers have stopped writing new homeowners policies in high-risk regions. Others are slashing renewals or raising rates by double digits. Consumers are left wondering: Am I covered?

Susman’s advice is both simple and crucial:

“You can’t control the market, but you can control how well you understand your coverage.”

Start with the “What If” Questions

Every policyholder should start by asking a series of “What if” questions—because those are the questions that determine whether you’ll be protected when disaster strikes. Susman encourages consumers to look beyond the basics and think in real-world scenarios.

• What if my home is damaged in a wildfire or flood?
  Many homeowners assume “fire insurance” means all natural disasters are covered. But flood and earthquake coverage are excluded from standard policies. You’ll need separate policies or endorsements.
• What if I rent out my home?
  Short-term rentals through platforms like Airbnb often invalidate standard homeowners policies. You’ll need a landlord or rental endorsement.
• What if someone gets hurt on my property?
  Liability coverage is often overlooked but essential. “If a contractor, delivery driver, or even a guest is injured, you could be on the hook,” Susman notes.
• What if my car is stolen—or flooded?
  Auto insurance isn’t one-size-fits-all either. Comprehensive coverage protects against theft, vandalism, and weather damage, but not if you only carry liability.

By framing coverage discussions around realistic “What if” situations, consumers can spot gaps that might otherwise go unnoticed.

Don’t Wait Until Renewal Time

Too many policyholders only look at their coverage once a year—when their renewal notice arrives. But as Susman warns, “By the time your renewal shows up, it’s too late to fix a problem.”

Instead, he advises reviewing your coverage after any major life change or property improvement. Examples include:

• Remodeling or adding square footage
• Buying or leasing a new car
• Starting a home-based business
• Acquiring valuable items (jewelry, electronics, collectibles)
• Adding new drivers to your household

Failing to update your policy can result in underinsurance—or worse, claim denial.

A homeowner who renovated their kitchen and added solar panels, for instance, could find that their original dwelling limit no longer covers the full rebuild cost. Likewise, parents who let a teen drive the family car without updating their auto policy risk invalidating their coverage in an accident.

“Insurance isn’t a ‘set it and forget it’ product,” Susman reminds listeners. “It’s a living contract that has to evolve with your life.”

Understanding What’s Not Covered

One of the biggest sources of misunderstanding isn’t what’s included—it’s what’s excluded. Exclusions are where the true limits of a policy are defined.

Common homeowners exclusions include:

• Earthquakes and floods (require separate coverage)
• Wear and tear or neglect
• Pest damage (rodents, termites)
• Power failure or government action
• War or nuclear hazard

Auto insurance exclusions can include:

• Commercial use (e.g., ridesharing without a specific endorsement)
• Intentional damage
• Driving under the influence

“If it’s not in writing, it’s not covered,” Susman emphasizes. “Verbal assurances mean nothing in the claims process.”

His advice: always request a full policy copy and read the declarations page (which lists coverages and limits) along with the exclusions section. Highlight anything unclear and ask your agent to explain it in plain language.

How Agents and Brokers Can Help

Many consumers don’t realize there’s a difference between an insurance agent and an insurance broker. Agents typically represent one company, while brokers work with multiple carriers to find the best fit.

Susman, who operates as a broker, emphasizes the value of independent advocacy:

“When you buy through a broker, you’re not just buying a policy—you’re getting an advisor who can help you navigate changes, claims, and renewals.”

However, he also cautions that consumers need to do their part. “Don’t expect your agent to read your mind. You have to tell them what’s new—your remodel, your side business, your teenager getting their license. The more we know, the better we can protect you.”

In today’s volatile market, agents and brokers have become more than salespeople; they’re risk consultants helping clients adapt to shifting regulatory and environmental realities.

California’s Market Instability: A Perfect Example

The state’s insurance turmoil underscores why policy literacy matters.
As carriers flee high-risk zones and the California FAIR Plan struggles to absorb displaced homeowners, consumers are left juggling multiple policies—often from different providers.

One homeowner might have:

• A FAIR Plan fire policy
• A separate “difference in conditions” (DIC) policy for liability and theft
• A flood policy from FEMA’s National Flood Insurance Program

Keeping these pieces coordinated is essential. Without careful alignment, gaps can emerge between what one policy covers and another excludes.

“People think if they have multiple policies, they’re double-covered,” Susman explains. “But often they’re double-paying for one risk and not covered at all for another.”

The Hidden Role of Inflation and Rebuilding Costs

Even if your coverage limits look adequate, inflation and supply-chain issues have quietly eroded their value. The cost of construction materials, labor, and equipment has surged dramatically since 2020.

A policy written five years ago for a $500,000 home may now fall $200,000 short of the actual rebuilding cost. “If your home burns down tomorrow,” Susman warns, “you’ll get a check that’s nowhere near enough.”

To prevent this, he recommends:

• Asking for inflation guard coverage, which automatically adjusts limits.
• Getting a replacement cost estimator from your insurer or agent every two years.
• Reviewing “ordinance or law” coverage, which pays for upgrades required by new building codes.

The Power of Proactive Communication

The key theme throughout Susman’s discussion is proactive communication.
Don’t wait for your insurer to tell you something’s wrong—ask questions before a claim arises.

Some smart ones to start with:

• What’s my deductible, and can I afford it out of pocket?
• Are there any sub-limits (for jewelry, electronics, etc.)?
• What’s excluded from coverage, and can I add an endorsement?
• How are claims handled—directly, through my agent, or a third-party adjuster?
• Is my home insured for replacement cost or actual cash value?

As Susman puts it, “The smartest policyholders are the ones who ask the most questions.”

Educated Consumers = Stronger Markets

One of the most overlooked benefits of insurance literacy is how it strengthens the entire market.
When consumers understand what they’re buying, they file fewer unnecessary claims, commit less fraud, and build healthier long-term relationships with their insurers.

Susman believes education isn’t just about helping individuals—it’s about stabilizing the system. “The more informed policyholders are, the better insurers can price risk accurately. It’s a win-win.”

Final Thoughts: Take Control of Your Coverage

In today’s unpredictable insurance environment, confusion can be costly. Whether you’re facing wildfire risks, rising premiums, or complex coverage terms, knowledge is your most valuable tool.

Susman’s bottom line is empowering:

“Insurance doesn’t have to be scary. But it does have to be understood.”

Take time to read your policy. Ask tough questions. Keep your agent informed. And remember—the best coverage isn’t just about price. It’s about protection that works when life doesn’t go as planned.