California's insurance landscape is in crisis — and at the center of it all lies the California FAIR Plan, the state's insurer of last resort.
In his Insurance Hour episode, "Depopulating California's FAIR Plan — What Are They Thinking?", insurance expert Karl Susman walks listeners through the complex web of regulatory reform, market dysfunction, and government response that's shaping the state's insurance future.
What he reveals is not just a policy debate — it's a fundamental reset of how insurance will work in California for years to come.
Susman opened the episode by referencing Insurance Commissioner Ricardo Lara's testimony before the California Assembly Committee on Insurance. Lara's remarks, Susman noted, captured the urgency of the moment:
"California is at an insurance crossroads — and for many Californians, this is an emergency. An insurance emergency."
The data supports it. As Susman explained, nearly 87% of California's admitted insurance market is either shut down or heavily restricted. For homeowners trying to obtain coverage — particularly in wildfire-prone regions — the process has become painfully difficult, if not impossible.
That's why the California Sustainable Insurance Strategy (CSIS), a sweeping reform plan from the Department of Insurance, has become the state's blueprint for recovery.
The CSIS isn't a single law — it's a comprehensive regulatory framework designed to reopen California's frozen insurance market. Susman broke it down into five key goals:
Increase insurance availability
Reduce dependence on the FAIR Plan ("depopulate it")
Integrate catastrophe modeling and mitigation discounts
Modernize the FAIR Plan's infrastructure and operations
Improve long-term market stability
Each point is part of a larger mission: to make private insurers willing to write new policies in California again.
< ..."The current system doesn't address today's challenges," Susman quoted Lara as saying. "Insurance reforms are long overdue."
