California Insurance Crisis and Distracted Driving

Published Date: 07/23/2024

California’s insurance system is at a crossroads. Homeowners across the state are grappling with soaring premiums, disappearing coverage options, and a marketplace teetering on the edge of dysfunction. At the same time, California’s roadways are seeing a surge in distracted driving accidents and growing safety concerns.



In a special episode of Insurance Hour, host Karl Susman sat down in Sacramento with Assemblyman Tom Lackey — a former California Highway Patrol officer and a ten-year veteran of the State Legislature — to discuss two pressing issues shaping daily life in the state: the insurance crisis and the dangers of distracted driving.

What followed was a candid conversation about affordability, accountability, and the complexities of public safety and insurance reform in one of the nation’s most highly regulated markets.

From the Highway to the Capitol

Assemblyman Tom Lackey’s story begins in the small desert town of Boron, California, a close-knit mining community of roughly 3,000 residents. His father was the local dentist, and Lackey’s early ambition was rooted in service and protection.

After earning a degree in special education, he spent a year teaching before pursuing his lifelong goal of joining the California Highway Patrol.

“I overcame the odds after teaching a year in special education,” Lackey recalled. “And I retired from the highway patrol after 28 years.”

That hands-on law enforcement experience gave him a front-row view of Californians’ day-to-day challenges — from traffic safety to economic hardship. Today, as a legislator representing parts of Southern California, he channels that same sense of duty into public policy.

“It’s a very rewarding battle at times,” he said, “and very frustrating at other times.”

One of the most frustrating battles he now faces is insurance.

The Distracted Driving Dilemma

Before turning to property insurance reform, Susman asked Lackey about an issue he has witnessed firsthand for decades: distracted driving.

“We all create habits,” Lackey said. “And these smartphones have become a big part of our lives. A significant majority of people do not abandon those habits when they get behind the wheel.”

According to the National Highway Traffic Safety Administration (NHTSA), distracted driving contributes to nearly one in ten fatal crashes in the United States. But for Lackey, the danger goes beyond statistics and into behavioral conditioning.

“When you drive, look around,” he said. “You’ll see a high percentage of drivers paying more attention to their devices than the road. That’s extremely dangerous.”

Susman added perspective from an insurance standpoint, noting how even a brief glance away from the road can have devastating consequences.

“The time it takes your eyes to refocus when you look down at your phone — even for a second — means you can travel the length of a football field without seeing the road ahead.”

Lackey agreed.

“Good driving requires attention,” he said. “These devices are impairing that attention — and it’s getting worse.”

Are Touchscreens Making Cars More Dangerous?

Susman raised another emerging safety concern: the rise of touchscreen-based vehicle controls. Many modern cars now rely heavily on digital menus instead of physical buttons and knobs, forcing drivers to look away from the road to adjust basic settings.

Some automakers have begun reconsidering that design choice and are exploring a return to tactile controls for safety reasons.

“If legislation came your way to support that, what would you think?” Susman asked.

“Anything that enhances safety, I support,” Lackey replied. “But I have to make sure I’m not being sold a bill of goods.”

Drawing on decades of observing driver behavior, Lackey emphasized that even well-intentioned policies can have unintended consequences.

“Anything that makes driving safer, I’ll support,” he said. “Because we’re in a dangerous set of circumstances. We not only have impairing devices, but we have substances entering into the public debate — and somehow it’s become political. I don’t understand how safety became political.”

That observation served as a natural transition into the larger debate surrounding insurance reform.

The Property Insurance Crisis in California

Susman turned to what he called “the elephant in the room”: California’s property insurance market.

Insurers are leaving the state or sharply limiting coverage. Premiums are rising rapidly. And many homeowners — even those without claims — are being non-renewed.

“Tell me what you’re hearing from your constituents,” Susman asked.

“Inaffordability,” Lackey replied. “That’s what I’m hearing — people can’t manage the cost. And I don’t have good, comforting news to share.”

After years of catastrophic wildfires, rising construction costs, and inflation, the state’s insurance system is under immense strain.

“We have agencies who make a profession out of this thing finding it very, very difficult to stay in business here,” Lackey said.

A Complex Problem With No Simple Fix

Both men agreed that the crisis has no single cause. Instead, it reflects a convergence of strict regulations, environmental risk, and an outdated regulatory framework under Proposition 103, which requires insurers to obtain state approval before raising rates.

“It’s not a simple problem,” Susman said. “And it’s not going to have a simple solution.”

Lackey agreed.

“It’s a complex challenge, and it’s affecting everyone — homeowners, renters, business owners. There’s no easy fix.”

The Sustainable Insurance Strategy

Susman asked about the Sustainable Insurance Strategy introduced in 2023 by California Insurance Commissioner Ricardo Lara. The plan is designed to modernize how insurance rates are calculated, streamline approvals, and encourage more insurers to remain in or return to the California market.

The Governor’s proposed trailer bill would allow parts of that strategy to be implemented more quickly through the state budget process.

“People are frustrated,” Lackey said. “They want to see progress, but they also want accountability. We can’t rush something this important without making sure it’s fair and effective.”

He acknowledged that speed matters, but so does transparency.

What’s at Stake for Homeowners and Insurers

Without reform, the situation could continue to worsen. California’s FAIR Plan — intended as a last-resort insurer for high-risk properties — has seen enrollment nearly double since 2019.

At the same time, private insurers argue that they cannot operate profitably under existing restrictions.

“You can’t expect a company to pay out billions in wildfire losses if they can’t adjust rates or use modern risk models,” Susman said. “They’ll just stop writing policies — and that’s exactly what we’re seeing.”

Lackey emphasized the need for balance.

“It’s not about letting corporations off the hook,” he said. “It’s about ensuring Californians can actually get insurance in the first place.”

The Misinformation Challenge

Lackey also pointed to widespread public misunderstanding surrounding how the insurance industry is regulated and what the state can realistically control.

“What’s real is the level of misinformation,” he said. “People think the government can just tell insurers to lower prices or stay in the market. It’s not that simple.”

This is where platforms like Insurance Hour play a role in educating the public.

“If we can help people understand how the system works, maybe we can lower the temperature and focus on solutions,” Susman said.

A Lawmaker’s Balancing Act

As both a former peace officer and a sitting legislator, Lackey often finds himself moderating between angry consumers and insurers that say the system is no longer workable.

“We’re in a tough spot,” he admitted. “The people are angry, and rightly so. But we also have to ensure California remains a place where businesses can operate. If no one can afford to insure, no one can afford to live.”

For that reason, he cautiously supports Lara’s modernization efforts.

“Anything that brings more carriers back to the table is worth exploring,” he said. “We just need to make sure the process stays transparent and accountable.”

What Californians Can Do Right Now

While lawmakers debate long-term solutions, Susman offered several practical steps for consumers navigating the current market:

• Stay informed by following California Department of Insurance announcements and rate filings.
• Work with experienced brokers who understand the surplus and FAIR Plan markets.
• Invest in home hardening and defensible space, which are becoming increasingly important under new underwriting standards.
• Avoid coverage gaps, as even short lapses can make future insurance harder to obtain.

The Human Side of Policy

Perhaps the most striking part of the conversation was Lackey’s empathy for those struggling under rising costs.

“This is affecting everybody,” he said. “Families, seniors, people on fixed incomes — they’re all being squeezed.”

Despite the frustration, his message reflected shared responsibility and cautious optimism.

“It’s easy to get cynical about politics,” he added. “But I still believe we can find solutions if we work together. We just have to stop making everything political.”

Final Thoughts on the Road Ahead

California’s insurance market remains in turmoil, but conversations like this one — between policymakers, industry professionals, and the public — are helping to chart a path forward.

Assemblyman Tom Lackey brings a rare blend of experience to the discussion, shaped by decades in law enforcement and years in the State Legislature.

His message to Californians is straightforward:

“Stay engaged. Stay patient. And remember — change takes time, but it’s coming.”

For now, progress depends on collaboration, education, and realistic expectations. Fixing California’s insurance crisis will not happen overnight, but with continued pressure for reform and accountability, meaningful improvement remains possible.