California's insurance market is in the middle of one of the most consequential shifts in decades. Insurers are leaving. Homeowners are panicking. Regulators are scrambling to restore balance between what's fair for consumers and what's sustainable for companies.
In this latest Insurance Hour conversation, Karl Susman sat down again with Assemblyman Tom Lackey, one of the few lawmakers in Sacramento willing to speak candidly about what fairness really means in this crisis — and why both the public and policymakers need to confront uncomfortable truths about cost, competition, and risk.
The discussion peeled back the politics and exposed the hard math behind California's insurance predicament — one where everyone wants relief, but few are willing to accept the reality of what it will take to achieve it.
As Susman put it early in the conversation, "What's fair to one person might not be fair to another."
It's a deceptively simple statement that goes to the heart of California's insurance crisis. For consumers, "fair" often means affordable coverage and stable premiums. For insurers, it means the ability to operate profitably in one of the world's most disaster-prone regions.
Lackey captured the tension perfectly:
"In order for us to have what we deserve to have here, it's got to make sense. It's got to pencil out. The reason companies have left isn't that they don't want to make money — it's that they don't think they can survive."
That distinction — between unwillingness and inability — matters. Insurers aren't leaving California out of spite; they're doing it because, under current regulations, many simply can't make the numbers work.
"You can't really blame someone for leaving when they feel like they can't be successful," Lackey said. "We're dealing with realistic circumstances."
When companies exit the market, competition decreases — and prices rise. It's basic economics, yet the politics surrounding "fairness" often obscure that truth.
One of the most striking points Lackey made was his frustration with misinformation and political posturing.
"When people mischaracterize the problem and aren't forthright about what we're facing, it pacifies one group versus another — and makes it look like everything's going to be okay," he warned.
The result is a dangerous form of complacency. For years, California has delayed tough reforms in hopes that the crisis would resolve itself. It hasn't.
"It's a habit-forming circumstance," Lackey said. "We procrastinate until we can procrastinate no more. And I think we're right there."
