Wildfires, Earthquakes, and Cyber Threats: Is Your Insurance Enough?

Published Date: 01/10/2025

Wildfires, Earthquakes, and Cyber Threats: Is Your Insurance Really Enough?

In an age of unpredictable disasters — from raging wildfires and shattering earthquakes to invisible cyberattacks — the question of whether your insurance is truly enough has never been more urgent.
During a recent episode of Insurance Hour, host and insurance expert Karl Susman tackled this exact concern, offering practical answers to listener questions and unpacking how modern risks are redefining what it means to be properly insured in 2025.

What began as a Q&A session turned into an insightful masterclass on how ordinary policyholders can protect themselves in extraordinary times — and how today’s “hard market” makes that more challenging than ever.

1. The Modern Insurance Landscape: Complexity and Confusion

Susman opened the episode with a reminder: insurance today is far more complicated than it used to be.

“Insurance isn’t simple anymore,” he said. “It’s more important than ever that you find a trusted advisor who can help you make sure you’re getting the coverage you think you have — and the coverage you actually need.”

Between climate-driven catastrophes, inflation-driven construction costs, and the rise of digital risks, policyholders are now facing gaps that didn’t exist even a decade ago. Many assume they’re fully covered — until disaster strikes.

That’s why the modern insurance conversation can’t just focus on price. It must focus on protection, understanding, and adaptability.

2. Fire Risk and the Question of Non-Renewals

One of the first listener questions came from Gavin, a homeowner in a wildfire-prone region. His concern was one shared by many Californians:

“How can I be certain my policy won’t drop us after a major wildfire or raise our rates?”

Susman acknowledged the anxiety is justified — after all, entire neighborhoods have faced non-renewals from insurers like State Farm and Allstate. However, the situation depends on whether the policyholder is covered by a private insurer or through the California FAIR Plan, the state’s insurer of last resort.

“If you’re already on the FAIR Plan,” Susman explained, “you shouldn’t worry about being dropped because that plan exists for exactly this reason — to cover people the private market won’t.”

But for private policies, renewal depends on material changes in risk exposure.

“If your area’s risk profile changes — say, new fire maps or higher fuel load — insurers can reprice or even withdraw. They’re not obligated to renew if the risk is no longer what they agreed to cover.”

In other words, even if your home hasn’t changed, the risk environment around it may have — and that alone can trigger non-renewal.

3. Tiny Homes, Mobile Living, and Insuring the Unusual

Another listener asked about insuring a tiny home on wheels — a trend growing across the country as people seek flexibility and affordability. But as Susman pointed out, that freedom brings unique challenges.

“Each insurer classifies these differently,” he said. “Some treat them as RVs, others as mobile homes, and others as stationary dwellings. The key is to work with an independent broker who can match you to the right product.”

This exchange highlighted a larger truth: insurance isn’t “one-size-fits-all.” With new lifestyles and hybrid living arrangements on the rise — from short-term rentals to modular homes — coverage must evolve to match. If it doesn’t, homeowners risk discovering dangerous coverage gaps only after a loss.

4. Earthquakes: The Overlooked Catastrophe

In California, fire often dominates the headlines — but earthquake risk remains the silent giant.
Susman took time mid-show to spotlight a critical truth most homeowners forget:

“Earthquakes are not covered by your homeowners policy. Period. You need a separate policy.”

That policy, he noted, doesn’t have to be unaffordable. Companies like GeoVera, for example, offer flexible earthquake policies with varying deductibles and coverage options.

“They’re financially solid and competitively priced,” Susman said. “I carry my own policy with them.”

He urged listeners not to dismiss earthquake coverage simply because “it hasn’t happened yet.” Science is clear — the big one will happen. It’s just a matter of when.

“Don’t wait until the ground shakes to find out you’re not covered,” he warned.

5. The Service Animal Question: Insurance’s Gray Areas

In one particularly thoughtful segment, a listener asked about insurance coverage for service animals — not for liability if the animal injures someone, but for loss or injury to the animal itself.

Susman’s research revealed a troubling gap:

“Standard homeowners policies treat animals as property. There’s coverage for fire or theft, but not for replacing or retraining a service dog. No insurer I could find offers that kind of specific protection.”

He suggested that those with unique insurance needs — from service animals to high-value collectibles — should work with independent brokers who can access specialized or Lloyd’s of London–type markets.

“If a celebrity can insure their voice or an athlete can insure their arm,” he noted wryly, “you can find a custom policy for your dog. You just need to work through the right channels.”

6. Classic Cars and Sentimental Value: Knowing What Insurance Can’t Do

Another listener asked about insuring an old collector car with sentimental value — not necessarily financial worth.

Susman’s response was both pragmatic and revealing:

“There’s no policy for sentimentality,” he said. “An insurer can’t pay you for what something is worth to you. They can only pay for what it’s worth on the market.”

However, he confirmed that classic car insurance exists for vehicles that are rare, vintage, or primarily for show. These policies require appraisals, limited-use declarations, and sometimes special storage conditions.

The lesson? Emotional attachment is priceless — but insurance is built on measurable value.

7. Electric Cars and the Myth of Battery Coverage

With electric vehicles dominating California’s roads, one listener asked if their insurance would cover battery degradation over time.

Susman’s answer was blunt:

“No — and it’s not because insurers are being mean. It’s because insurance covers unexpected losses. Battery degradation isn’t unexpected; it’s inevitable.”

He explained that insurance only works when there’s uncertainty and calculable risk. Predictable wear and tear, like old roofs or fading paint, falls outside that model.

“You can’t insure something that’s guaranteed to happen,” he explained. “That’s not insurance — that’s just prepaying for a future repair.”

This simple clarification cuts to the heart of consumer misunderstanding. Insurance isn’t designed to maintain assets — it’s designed to restore them after sudden, unforeseen damage.

8. Climate Change and the Collapse of Predictive Models

Perhaps the most profound takeaway from the episode came when Susman connected these individual questions to the broader market instability.

“The old predictive models just don’t work anymore,” he said. “Insurance companies used to know, on average, how often a disaster would hit and how bad it would be. Now, the frequency and severity of losses are increasing faster than the math can keep up.”

Wildfires, hurricanes, floods — all are striking with greater intensity and less predictability. That uncertainty makes it harder for insurers to price risk — which in turn makes it harder for consumers to find affordable coverage.

The result? A “hard market” where insurers cap exposure, limit new policies, and pass higher costs on to homeowners.

9. Short-Term Rentals, Vacant Homes, and Policy Pitfalls

Several callers asked about how renting out properties — or leaving them vacant — affects coverage.

Susman clarified that short-term rentals (like Airbnb) require specialized policies — homeowners insurance won’t cover damage caused by paying guests.

Likewise, leaving a property vacant for extended periods can void portions of coverage.

“Policies are written for occupied homes,” he explained. “If no one’s there for months, the risk changes dramatically — pipes burst, vandalism happens, fires go unnoticed. That’s why insurers charge more for vacant properties.”

For Californians who travel often or own second homes, these distinctions are essential — and too often overlooked.

10. The Bigger Picture: Evolving Risk in an Uncertain World

From wildfires to cyber risks, the modern homeowner faces an expanding universe of exposures. Traditional policies often lag behind these realities, leaving coverage gaps that can devastate families financially.

Susman’s advice is clear:

• Review your policy annually — especially after renovations, relocations, or natural disasters.
• Work with an independent broker who represents multiple carriers, not just one.
• Ask questions about exclusions, deductibles, and limits before disaster strikes.
• Stay proactive — the best time to adjust coverage is before you need it.

“Insurance isn’t about fear,” Susman concluded. “It’s about readiness. You can’t stop the earthquake, or the fire, or even the hacker. But you can make sure that when it happens, you’re not starting from zero.”

Conclusion: Adapting to the New Era of Risk

The episode’s final message echoed throughout every segment — the world is changing, and insurance must change with it.

Whether it’s preparing for the next wildfire, insuring an electric car, or guarding against digital theft, homeowners must approach insurance not as a static product but as a living, evolving safeguard.

In today’s California — and increasingly, across America — being insured isn’t enough. Being properly insured is.