In today’s turbulent California insurance market, homeowners, business owners, and everyday drivers are feeling the strain. Premiums are rising, coverage options are shrinking, and even long-time policyholders are facing unexpected nonrenewals. It’s no surprise that many people are asking the same question: how can I save money on insurance without exposing myself to unnecessary risk?
In a recent episode of Insurance Hour, industry expert Karl Susman tackled these challenges head-on — from how high deductibles really affect premiums to whether bundling still works in a fractured market. He also addressed a fast-growing area of concern: cyber insurance. Here are the episode’s most important takeaways for Californians navigating today’s difficult insurance landscape.
Can a $500,000 Deductible Really Save You Money?
One listener opened the discussion with a bold question:
“Can I have a $500,000 deductible? Will I save money?”
The logic seems simple — take on more risk and pay less in premium. But Susman explained that there is a clear point of diminishing returns.
“There’s an aspect of diminishing returns,” he said. “At some point, the insurance carrier can’t keep reducing your premium just because you raise your deductible.”
Moving from a $1,000 deductible to $2,000 can produce noticeable savings. But raising a deductible from $10,000 to $50,000 often barely changes the premium. Once most small and mid-sized claims are eliminated from the insurer’s exposure, the remaining risk doesn’t shrink enough to justify significant premium reductions.
Why Deductible Savings Eventually Plateau
Insurance pricing is driven by data, not emotion. Carriers evaluate how often claims are filed and how costly they are on average. Once your deductible is high enough that you are unlikely to file small claims, most of the insurer’s “nuisance risk” is already removed.
“There’s a point where you’re going to reach a deductible where you won’t see a premium change at all,” Susman explained. “You’ve basically reached the ceiling.”
For many standard homeowners policies, that ceiling is often between $5,000 and $10,000. For high-value homes or large commercial properties, the ceiling may be higher, but it is still finite.
Matching Your Deductible to the Size of Your Risk
Deductibles only make sense when viewed in proportion to what you are insuring. A $10,000 deductible on a $300,000 home represents a very different level of risk than the same deductible on a $10 million property.
“If you’re insuring something for a million dollars, a $50,000 deductible means one thing,” Susman said. “If you’re insuring ten million, then a $100,000 deductible might make sense.”
The goal is balance. Your deductible should be high enough to reduce premium and discourage small claims, but not so high that paying it would cause financial strain after a major loss.
Does Bundling Still Work in a Fragmented Market?
Another listener raised a common problem in California’s restricted market:
“My home insurance is with one company, and my auto has to be with another because of my child’s driving record. How can I still get a bundle discount?”
Traditionally, bundling home and auto with the same carrier was one of the easiest ways to save money. Today, many insurers no longer write both lines, especially in high-risk areas.
Susman explained that some companies still offer what’s known as an in-house discount. If both your home and auto are written through the same broker — even with different carriers — some insurers will still provide a partial multi-policy discount. The logic is that customers who consolidate their business with one agency tend to be more stable and less likely to leave.
Not every company offers this option, but it’s worth asking your broker directly.
Why Insurers Reward Multi-Policy Customers
Bundling discounts aren’t about convenience alone — they’re driven by customer behavior.
“Statistically, the more policies you have with one company, the more likely you are to stay with that company,” Susman explained. “And for some reason, the less likely you are to file a claim.”
Multi-policy customers tend to be more loyal and, on average, less risky. Insurers reward that behavior with better pricing because it reduces turnover and uncertainty in their books.
The Growing Importance of Cyber Insurance
Susman also turned to one of the fastest-growing gaps in modern coverage: cyber insurance. Many small businesses — and even individuals — still assume they’re too small to be targeted by hackers. That assumption is dangerous.
“Hackers aren’t looking for size — they’re looking for vulnerability,” Susman said. “A lot of small businesses think they’re not big enough to be hacked, but that’s exactly why they’re targeted.”
Cyber insurance can cover:
- Ransomware attacks
- Data breaches and associated legal liability
- Business interruption from network shutdowns
- Cyber extortion and negotiation costs
- Customer notification and forensic recovery
Most general liability policies exclude cyber events, meaning separate cyber coverage is often required.
The good news is that cyber policies are still relatively affordable for many small businesses. However, insurers now expect strong digital hygiene — such as multi-factor authentication, secure backups, and employee training — before offering full protection.
Dog Breeds and Homeowners Insurance Restrictions
Earlier in the episode, Susman addressed another surprising underwriting reality: dog breed restrictions.
“Yes, currently an insurance company can refuse coverage based on the breed of dog you have,” he confirmed.
Certain breeds are statistically associated with higher liability claim rates, and many insurers still use breed-based underwriting in California. Specialty carriers and surplus-line markets may offer alternatives, but these policies often come at a higher cost. While consumer advocates continue to push for reform, breed restrictions remain legal in most cases.
The Bigger Forces Driving Today’s Insurance Market
Susman emphasized that individual frustrations are part of a much larger market shift driven by:
- Climate-related disasters such as wildfires and floods
- Inflation and escalating construction costs
- Regulatory pressure affecting how insurers price risk
- Financial downgrades that push carriers to become more conservative
Together, these forces have created a cycle of tightening underwriting, rising premiums, and shrinking coverage options across California.
Final Thoughts: Smart Risk Management in Uncertain Times
The consistent message throughout the episode was balance. You can’t eliminate risk, but you can manage it intelligently. You can’t always lower premiums, but you can understand what drives them — and make informed choices.
Whether you’re evaluating a higher deductible, trying to preserve bundling discounts, or considering cyber insurance for the first time, knowledge is your strongest protection.
“Insurance isn’t about fear,” Susman concluded. “It’s about being prepared. Once you understand how risk, price, and protection fit together, it stops being confusing and starts being empowering.”
