Unveiling California's Insurance Mysteries: A Conversation with Assemblyman Tom Lackey
Published Date: 07/28/2024
Unveiling California’s Insurance Mysteries: Assemblyman Tom Lackey and Karl Susman Call for Honesty, Leadership, and Real Reform
California’s homeowners insurance crisis has reached a breaking point. Premiums are skyrocketing, carriers are retreating, and consumers are running out of options. While the debate often focuses on rate filings, reinsurance costs, and market dynamics, one underlying truth remains: the system can’t fix itself without leadership, honesty, and collaboration.
That was the message at the heart of the latest Insurance Hour conversation between host Karl Susman and Assemblyman Tom Lackey — a former California Highway Patrol officer turned lawmaker, who has become one of the most straightforward voices in Sacramento’s insurance reform discussions.
Their conversation wasn’t about political talking points or technical jargon. It was about truth — the hard kind — and the uncomfortable reality that California’s insurance market can’t survive without difficult decisions.
“We Can’t Ignore It Anymore”
As the episode opened, Susman asked Lackey where he sees California’s insurance situation heading. The Assemblyman’s answer was blunt:
“We can’t ignore it anymore. We have to be honest with people. I believe there’s more mystery than there are answers right now. And it’s because there’s a lot of hesitation to be factual.”
That hesitation — whether from political caution or fear of backlash — is, in Lackey’s view, one of the greatest obstacles to reform. Without transparency about what’s broken, Californians can’t understand what needs to be fixed.
“Once we start feeling comfortable being factual and honest with people,” he said, “we’ll find a solution. It won’t be comfortable for a lot of people, but it will be manageable. And that’s what we need.”
Susman agreed, noting that both consumers and policymakers often prefer comforting narratives to hard truths — yet those narratives have led the state into its current crisis.
“We’ve gotten to a point where there’s nowhere left to go,” Susman said. “We have carriers leaving, and the few that remain are charging rates that are not sustainable for consumers.”
“We Need Leadership — and We Need It Now”
Throughout the discussion, both men returned repeatedly to one word: leadership.
“The insurance commissioner needs to stop making excuses,” Lackey said. “He needs to come up with something. And if he needs help — from the Legislature, from the Governor, from whoever — he needs to come forward and be honest. That’s what we need. That’s what a leader does.”
It was a pointed but respectful reminder that responsibility lies at every level — from regulators and lawmakers to industry executives.
Lackey emphasized that the crisis isn’t just a policy issue; it’s a leadership challenge. Too many people, he said, are afraid to say what everyone already knows: the current system is unworkable.
“We are starving for a solution,” he said. “People in my district call every week. Some of these people’s insurance rates have tripled. Not 20% or 30% — 300%. That’s not reasonable.”
His choice of words — “reasonable” — echoes a theme he’s discussed in earlier Insurance Hour episodes: that fairness is subjective, but reasonableness can be defined and pursued.
The Crisis on the Ground: 300% Increases and No Relief
For many Californians, Lackey’s comments hit home. The stories pouring into his office mirror what agents and brokers across the state are seeing daily: middle-class families suddenly facing impossible bills for policies that cover less than they used to.
“We get calls every week,” Lackey said. “They’re catastrophic circumstances. Some of these increases are absolutely unmanageable.”
Susman pointed out that while public debate often centers on “average” rate increases of 20–30%, the reality is much worse in fire zones and rural communities.
“Those numbers don’t reflect what’s really happening,” Susman said. “I’ve seen homeowners go from $2,000 a year to $8,000 or more. That’s not sustainable.”
For both men, the problem isn’t just that rates are high — it’s that there’s no consistency. Insurers that remain in the market are offering drastically different terms, and the California FAIR Plan, meant to be a last resort, is now serving as a primary option for hundreds of thousands of homeowners.
“We’re not accomplishing our job when it comes to finding real solutions,” Lackey said. “It’s not really the Legislature’s job to fix it directly — but it’s our job to be a partner in facilitating something that works.”
The “Shared Reality” of Discomfort
If there was one recurring phrase in the conversation, it was this: there is no comfortable answer.
“There needs to be some agreement that discomfort is going to be a shared reality,” Lackey said. “There’s no comfortable answer. And that’s what people need to hear.”
Susman echoed the sentiment.
“Some groups are spreading catastrophic worst-case scenarios just to stay relevant,” he said. “That’s not helpful. We need everyone to become helpful. We need to face reality together.”
That idea — shared discomfort — is both sobering and empowering. It acknowledges that everyone, from regulators to insurers to homeowners, will need to give something up for the system to stabilize.
As Lackey put it:
“People aren’t going to like it. Some will reject it. But they’re not going to be part of solving the problem. We need people who are willing to face facts.”
Defining Success: Competition and Reasonableness
When Susman asked how Lackey defines “success,” the Assemblyman didn’t hesitate.
“Improvement,” he said. “Improvement in the rate structure, improvement in reasonableness, and not accumulating all these people who can’t survive here. Competition is one of the metrics that will indicate whether or not we have a reasonable standard — because that’s what really drives rates down.”
It’s a reminder that the insurance market is still a market, and the laws of supply and demand apply. If insurers can operate profitably and predictably, they’ll compete for business — and that competition, in turn, lowers costs.
But when regulation, uncertainty, and political gridlock make profitability impossible, companies retreat — and consumers pay the price.
“Supply and demand is a reality,” Lackey said. “It’s a reality that has to be faced.”
Communication: The Path to Progress
As the discussion drew to a close, Lackey and Susman agreed on one final takeaway: communication is key.
“The only way we’re going to solve this thing is by communicating with one another,” Lackey said. “But we need honest communication.”
That means transparency from regulators about what’s delaying reforms, openness from insurers about what’s driving rates, and clarity from policymakers about what consumers should expect.
“We’ve got to stop talking past each other,” Susman added. “There’s a lot of misinformation — and people are scared. The only way to fix that is with facts.”
It’s a theme that’s defined much of Susman’s work as a consumer educator: bridging the gap between the technical and the practical, helping homeowners understand not just what’s happening, but why.
A Call for Courage
If there was an emotional core to the conversation, it was the shared recognition that courage — not comfort — will solve California’s insurance crisis.
“We have to rip the Band-Aid off,” Lackey said. “It’s time.”
That’s not a call for recklessness. It’s a call for action — for moving beyond blame and toward pragmatic solutions.
“We need leaders who don’t just step up,” Susman said. “We need them to swing and make contact.”
Lackey agreed. “The leadership we need has to step up and not just step up — but act. Where we are can’t continue.”
A Glimmer of Optimism
Despite the frustration, both men found reasons for cautious optimism. Some major carriers, they noted, have begun signaling a willingness to reenter the California market — contingent on meaningful regulatory reform.
“If we can believe that,” Susman said, “and not look at it completely with a jaundiced eye — maybe just a little — we can be optimistic for the future.”
Lackey agreed, adding that optimism must be paired with accountability.
“We’re not going to solve this overnight,” he said, “but we can improve it. We can make it manageable. That’s what leadership looks like.”
Contact and Civic Engagement
In keeping with his practical approach, Lackey shared his contact information, inviting constituents to reach out directly with concerns or questions:
- Capitol Office: (916) 319-2034
- Email: assemblymemberlackey@assembly.ca.gov
- District Office (Palmdale): (661) 267-7636
- Website: assembly.ca.gov/lackey
“If you’re in my district and you’re struggling, reach out,” he said. “We’re listening.”
The Final Word: Honesty Above All
Susman closed the episode by returning to the theme that has defined Insurance Hour since its inception: education through honesty.
“Insurance isn’t the sexiest topic in the world,” he said. “But it’s one of the most important. You need to know what you’re buying, what to look for, and what red flags to avoid. Things are more complicated than they used to be, and it’s time we all understood them better.”
He left listeners with a reminder that while the crisis feels overwhelming, the path forward is built on small steps — communication, transparency, and shared responsibility.
“Educating and entertaining Californians one insurance policy at a time,” he said, closing the show in his signature style.
Key Takeaways
- Honesty is the foundation of reform. California’s insurance market won’t stabilize until regulators, lawmakers, and industry leaders tell the full truth about what’s driving rates and limiting coverage.
- Leadership matters. The Insurance Commissioner and state government must stop deflecting and start acting decisively — in partnership with carriers, not in opposition to them.
- Discomfort is inevitable. Real reform means accepting shared pain in the short term for long-term stability.
- Competition drives affordability. Bringing insurers back to California is the only sustainable way to lower rates.
- Communication is critical. Consumers deserve clear, factual explanations — not fear-based narratives.
California’s insurance crisis has many causes — regulation, climate change, market volatility — but as Susman and Lackey made clear, its solution begins with something simple: honesty.
As Lackey put it best:
“We need honest communication. That’s my takeaway.”
Author