Leadership and Honesty in California’s Insurance Crisis

Published Date: 07/28/2024

California’s homeowners insurance crisis has reached a breaking point. Premiums are skyrocketing, carriers are retreating, and consumers are running out of options. While debate often centers on rate filings, reinsurance costs, and market mechanics, one underlying truth remains: the system cannot fix itself without leadership, honesty, and collaboration.



That was the central message 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 direct voices in Sacramento’s insurance reform discussions.

Their discussion avoided political theater and technical jargon. Instead, it focused on uncomfortable truths and the reality that California’s insurance market cannot survive without difficult decisions.

“We Can’t Ignore It Anymore”

When Susman asked where Lackey believes California’s insurance situation is headed, the Assemblyman did not soften his response.

“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.”

Lackey argued that political caution and fear of backlash are preventing the kind of transparency that real reform requires. Without clear communication about what is broken, Californians cannot understand what must change.

“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 comforting narratives have displaced hard truths — and that avoidance has helped create the 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”

Leadership was the dominant theme throughout the conversation.

“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.”

Lackey stressed that responsibility is shared across government and industry. The crisis is not just a regulatory failure — it is a leadership failure.

“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 repeated use of the word “reasonable” reflects a central theme in his insurance reform philosophy: fairness is subjective, but reasonableness can be measured and pursued.

The Crisis on the Ground: 300% Increases and No Relief

The real-world impact of the crisis is already devastating. Lackey described a steady stream of calls from constituents facing impossible choices.

“We get calls every week,” he said. “They’re catastrophic circumstances. Some of these increases are absolutely unmanageable.”

Susman emphasized that widely reported “average” increases of 20% to 30% understate the severity of the problem in wildfire zones and rural communities.

“Those numbers don’t reflect what’s really happening,” he said. “I’ve seen homeowners go from $2,000 a year to $8,000 or more. That’s not sustainable.”

Even worse, the California FAIR Plan — intended to serve as a last-resort option — is now functioning as the primary insurer for hundreds of thousands of homeowners. Coverage is shrinking, costs are rising, and consistency has vanished.

“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 one message echoed throughout the discussion, it was this: there is no pain-free solution.

“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 warning.

“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.”

Both men emphasized that stabilization will require shared sacrifice — from regulators, insurers, homeowners, and policymakers alike.

“People aren’t going to like it,” Lackey said. “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 would define success in reforming California’s insurance market, the answer was immediate.

“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.”

At its core, Lackey argued, insurance is still a market governed by supply and demand. When carriers can operate profitably and predictably, they compete. That competition lowers prices.

When regulation, uncertainty, and political paralysis block profitability, insurers retreat — and consumers pay the price.

“Supply and demand is a reality,” Lackey said. “It’s a reality that has to be faced.”

Communication as the Path to Progress

As the episode neared its conclusion, both men returned to the role of communication in solving the crisis.

“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 delays, openness from insurers about what drives rates, and clarity from lawmakers about what consumers should realistically 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.”

Susman reinforced his long-standing mission as an educator: to translate industry complexity into practical understanding for everyday Californians.

A Call for Courage

At the emotional core of the discussion was a shared belief that courage — not comfort — will determine the outcome of California’s insurance crisis.

“We have to rip the Band-Aid off,” Lackey said. “It’s time.”

Susman framed the challenge in similarly blunt terms.

“We need leaders who don’t just step up,” he 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 pointed to early signs of cautious optimism. Some major carriers have reportedly signaled an openness to reenter the California market — if meaningful regulatory reform takes hold.

“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 but stressed that optimism must be matched 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

Consistent with his hands-on approach, Lackey shared his contact information and invited direct outreach from struggling constituents:

• 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 guiding principle of Insurance Hour: 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 reminded listeners that progress will come through small but critical steps — communication, transparency, and shared responsibility.

“Educating and entertaining Californians one insurance policy at a time,” he said in closing.

Key Takeaways

Honesty is the foundation of reform. California’s insurance market will not stabilize until regulators, lawmakers, and industry leaders fully explain what is driving rate increases and coverage losses.

Leadership matters. The Insurance Commissioner and state leadership must act decisively and collaboratively with carriers, not in constant opposition.

Discomfort is inevitable. Meaningful reform requires accepting short-term pain to secure long-term stability.

Competition drives affordability. Restoring a competitive insurance marketplace is the only sustainable path 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, and market volatility — but as Susman and Lackey made clear, its solution begins with something simple and difficult: honesty.

As Lackey summed it up:

“We need honest communication. That’s my takeaway.”