10 New Insurance Laws That Will Change Everything!

Summary

The video covers a detailed discussion by host Karl Susman on Insurance Hour about 10 new potential insurance laws being debated in Sacramento, California. The host analyzes each proposed legislation, focusing particularly on wildfire-related insurance reforms. Key topics include the California Safe Homes Act, Business Insurance Protection Act, and various other measures aimed at improving insurance accessibility and consumer protection. Susman provides detailed pros and cons for each proposed law, emphasizing their potential impact on both insurers and consumers. He notably mentions that the recent wildfires will be the most expensive disaster in U.S. history, and warns viewers to expect premium increases as a result. Throughout the discussion, he maintains a balanced perspective, acknowledging both the need for consumer protection and the challenges faced by private insurance companies.

Highlights

Introduction and Overview of 10 New Insurance Laws

Karl Susman introduces the show's topic: 10 new potential insurance laws being debated in Sacramento. He emphasizes these are different from recent Department of Insurance regulations, explaining they are new legislative proposals that will impact insurance policies in California. The host announces the show's phone number (559-656-0317) and email (Questions@InsuranceHour.com) for viewer feedback.

California Safe Homes Act Analysis

Susman discusses the first proposed law, sponsored by Assemblymember Lisa Calderon, which would establish a grant program for wildfire mitigation measures. The program would provide state tax-free funds for fire-rated roofs and non-ignition zones. He outlines pros including enhanced wildfire resilience and potential premium reductions, while noting cons such as state budget impact and potential implementation challenges.

Business Insurance Protection Act Discussion

The host analyzes the second proposed law, sponsored by Senators Sasha Renee Perez and Susan Rubio, which would extend residential insurance non-renewal moratoriums to commercial policies. Susman explains how this could stabilize the business insurance market while potentially leading to premium increases and legal challenges.

Insurance Premium Protector and Public Adjuster Regulations

Susman examines the proposal to cap public adjuster fees at 15% and prohibit additional awards outside contracts. He discusses the implications for wildfire survivors and the potential impact on the public adjusting industry, expressing concern about arbitrary price caps while acknowledging the need for consumer protection.

Final Thoughts and Future Premium Implications

The host concludes by emphasizing that the California wildfires will be the most expensive disaster in U.S. history. Susman warns viewers to expect premium increases but assures that legitimate claims will be paid, encouraging listeners to take advantage of available discounts and opportunities to lower premiums

Insurance Hour is hosted by renowned insurance expert Karl Susman. Karl is a frequent guest on television stations such as ABC, CBS, Spectrum, The CW and FOX, and now his popular radio program is available online throughout California and world-wide.

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Transcript

0:03

Buckle up, everyone. You are strapped in and ready for Insurance Hour. With me, your host, Karl Susman, informing, educating, and entertaining one policy at a time, this is Insurance Hour. Hello, hello. This is Insurance Hour. I am your host, Karl Susman. Thank you so much for being here today. Today, we are talking about all things insurance, including the recent wildfires. Our phone lines are open. The number is 559-656-0317. You can call or text that number or send your questions in to Questions@InsuranceHour.com. Today we are going to be talking about not one, not two, not half a dozen, but 10, yes, are being looked at and debated up in Sacramento that impact the insurance industry. I know. You might be thinking, wait a minute, didn't we just have an entire new slew of regulations go through? Those were regulations that the Department of Insurance put out. These are laws that would impact the insurance industry, however, they're coming from Sacramento. There are 10 of them, literally 10. Some very basic information is currently available, but what I'm going to do is I'm going to go through all 10 of them today for you and let you know at least what it is that each of the regulations is about, who the sponsors are, and some pros and cons of each one. For those of you that want to be up on what are the pending new laws that are coming down that will impact your insurance policies in the state of California and you've come to the right place, we're going to go through all 10 of them. Now some are, I shouldn't even say new, they're all brand new. These are not laws, these are pending laws that are being discussed with the different folks up north. And I'm sure they'll go through many iterations before they get finalized, before they get voted on, and certainly before they even see the light of day as far as becoming a law goes. So let's dive right into the first one. The first one is called the California Safe Homes Act. Now, it is sponsored by Assemblymember Lisa Calderon. The stated purpose is to establish a grant program to provide state tax-free funds for residents to implement wildfire mitigation measures, such as installing fire-rated roofs and creating non-ignition zones around the property. All right? So this is something that's being designed to try and incentivize people by way of a grant to be able to do work to make their homes less likely to burn. Sounds good so far. Let's look at the pros and cons. Some of the pros, this would obviously enhance... wildfire resilience for homes and communities, that's a good thing, it would potentially reduce insurance premiums by decreasing wildfire risks. Now, this is a big one. What we're basically saying is, look, we want to pay less for our property insurance. We want to pay less for our fire insurance. In order to do that, we have to lower our risk of there being a fire that that burns down our home. Well, there's not much we can do about controlling mother nature. So, what we can do is we can control the exposure that we have surrounding our home and the exposure that we have of our actual home. So, this is trying to incentivize for that. And another positive, another pro for this would be that it provides financial assistance to homeowners who are trying to make these upgrades to their home, if you will, to make it less likely to burn, but might not have access to the funds to do it, right? It's always the money. Now, what are some of the negatives, some of the cons to this bill potentially? Well, first of all, it requires allocation of state funds, which will impact the state budget. Well, we know how that tends to go, how sometimes we tend to spend way more than we have, and sometimes we tend to spend a little bit less. Sometimes we happen to have a surplus. It goes all over the place. It depends on the year, it seems like, but that's obviously one of the cons is that it is going to be dipping into state funds. The next potential problem is that the implementation and distribution of grants could be a major heartache. I mean, let's face it, anytime there's a major government entity of whatever form that's going to be trying to do something, especially giving money out, well, that could sometimes be problematic. Is that fair to say? Also, as you know, some of those bad actors start to come out whenever they see money. So I think there could be a massive amount of fraud if this is not looked at and maintained very carefully. And finally, homeowners may, and again it depends on how this potential law would come down, but as it states, as it stands right now, homeowners may need to cover upfront costs before receiving the grants. And that is a little unclear, but it might mean that some of the work has to be started and then the grant program will reimburse versus potentially all of it might need to be done. Again, it's not clear the bill is in its infancy, but in general the idea is that the state is going to provide money to allow people to do things to their home to make it less likely to burn. And because of those things being done, the insurance premium would go down. We would have less fires in general that would impact a large number of homes and everybody would be happy and live happily ever after, right? Well, that's always the goal, but that's the general stated purpose. Okay, now let's move on to the next potential law. This one is the Business Insurance Protection Act. Sponsor of this is Senator Sasha Renee Perez and Susan Rubio. The stated purpose being to extend existing residential insurance non-renewal moratoriums to include commercial policies, which offers protections to businesses similar to the protections that exist for homeowners. This basically is saying, look, you're coming up with lots of protections for residents and homeowners. We want the same thing for businesses. Now, this has the potential to stabilize the business insurance market, help maintain economic continuity after a disaster, and encourage insurance companies to continuing offering coverage because they're going to be getting that same level of protection. The negatives could be insurers might decide that they need to increase premium to offset that potential risk. It could lead to legal challenges because, hello, we're in California. And of course, it may require additional regulatory oversight in order to make it actually happen. Again, whenever we're looking at, you know, some type of a process that the government is funneling down or in this case, trying to change the insurance laws when we have the potential that there's going to be some type of legal upset, or there's going to be some type of mechanics that are going to make it challenging to do, right? We have to talk about giving money out for grants, or we have to talk about making insurance carriers do something that they otherwise would not normally want to do. Yeah, that might not always be the easiest thing in the world. But you know what the easiest thing in the world is? For you to sit there for another 60 seconds, we're going to take our first break. When we come back, we'll get on with the rest of these potential laws that they're looking at up north. This is insurance hour. I am Karl Susman. 60 seconds is all. Stand by and we will be right back. Let's talk about earthquakes for a minute. Look, we know we live in earthquake country here in California. Powerful, devastating earthquakes have happened here before, and science says that they will happen again. They can't tell us exactly when, they can just tell us that it is going to happen. Count on it. Prepare for it. Did you know that earthquakes are not covered by your homeowners insurance policy? You need a separate policy to give you the peace of mind that you will be able to recover without getting financially wiped out the next time we get hit with a big one. There is a great company here in California that will provide you with earthquake coverage you need at a price you can afford. That company is GeoVera. I have a policy through GeoVera. I really like how easy it is to choose from all of their great coverage options backed by the financial strength that lets me know that they will be here for me when I need them the most. Go to GetQuake.com forward slash insurance hour to learn more. That's GetQuake.com/insurance hour. Make sure you're ready for the day when the ground shakes again. Hello, hello, this is insurance hour. I am your host, Karl Susman. Thank you so much for being here today. The phone lines are not open because we are going through, are you ready, 10 new potential laws that the good people of Sacramento are discussing and we need to know about them so we can get involved if we like them, don't like them, want changes to them or whatever the case may be. Meanwhile, don't forget, you can still call our phone number or text it with your questions regarding insurance. That number is 559-656-0317 or send your questions in to Questions@InsuranceHour.com. I also want to thank our good friends over at GeoVera Insura nce Company. GeoVera is the place to get your earthquake insurance quotes and policies and have protection. I've actually had GeoVera on my home for several decades and as you can imagine, I could probably get my earthquake insurance from any company that I want to. As a matter of fact, they all want me to have the earthquake insurance. Everyone wants me to have their insurance policy, right? They want me to be able to say, well, I have my policy there because, of course, I'm the expert, right? So I should know best. Well, I have had my policy with GeoVera for a very long time. Very competitive rates, very, very customizable policies. They're good people. That's just the bottom line. These are good people and a good company. So if you're looking to get a quote for earthquake insurance and if you're in California, you certainly should, just go to insurancehour.com and you'll see the sponsor for GeoVera. Click on it. It takes maybe 30 seconds to get a quote. GeoVera, we thank you for your support of Insurance Hour. All right, back to the fun. You ready? We talked about the first two potential laws that are being discussed that would impact the insurance marketplace. And now we're going to talk about the next one. You ready? It is the Insurance Premium Protector. That sounds like a very dramatic name, isn't it? member John, oops, I'm gonna screw, I'm gonna mess up the name John Harabedian, and the purpose is to cap public adjuster fees at 15% and prohibit additional awards outside of the contract to ensure that wildfire survivors receive the maximum funds on their insurance claims. All right, this might need a little explanation. If people decide for one reason or another that they are not getting satisfaction with their insurance claim, they have the ability to sign away a portion of their recovery to a public adjuster. Now, what we're finding is that a lot of public adjusters, because as you can imagine with the wildfires in Southern California, are very busy. And when they're busy and they're in demand, they also have the ability to command potentially a larger percentage because they are in demand and there are only so many of them. So what this law potentially is set up to do is protect consumers from having to sign away more. than 15% of what their actual agreement is with the insurance company because that's normally how public adjusters work. They will get a percentage of the settlement from the insurance company. And this language also specifically calls out the practice for getting fees outside of that percentage. So it needs to be all and encompassing. So let's look at some pros and cons. Pros would say that it protects consumers from excessive fees during vulnerable times. Well, that is likely why we are seeing this right now because people are very vulnerable. They're eager to get back their homes. They're eager to get money to be able to start building, to be able to buy things. And unfortunately, at the same time, the insurance industry is slammed because of all of the claims and they are moving along. Some would say at a good pace. Some would say otherwise. And at the end of the day, some people have to decide what they want to do. Do they want to work with the claims adjuster and the insurance company and potentially their insurance agent or broker? Or do they want to try and have somebody else come in to try and expedite for them at a cost? And again, this is just to try and keep that from becoming a little bit over utilized maybe, or at least to protect consumers from paying more than at least the regulators think they should be. Another pro is that it ensures more insurance funds are available for rebuilding. Well, if less money is going to the actual independent adjuster, then the thinking is more money goes to the rebuilding, which is kind of the point of the insurance policy to begin with. Finally, stated purpose to promote transparency and fairness in the claims process. This is a big one because a lot of times, again, when things like this are going on, when there are major disasters like this, people are a little more quick to sign, right, without realizing what they're signing away or what it's going to cost them. They just want help. They want guidance. So this is going to make that a a little more transparent by being a little more specific with how independent adjuster contracts are written, what they can charge, and what they can't charge. Some disadvantages, this may discourage certain public adjusters from taking on complex claims, because again, they are independent. They can charge what they want, well, as of now. But this regulation would basically clamp down on what they are able to charge. Now, an adjuster might say, you know what? This is a massive case. This is very complicated. I can't do it for 15%. And I am not one to like being in a position where any type of regulation does anything to get its fingers involved in the way competition works. Now, independent adjusters are a competitive business. They can charge what they want, and people can hire them or not. Or in this case, they can negotiate with them. A policyholder could say, you know what? I only wanna pay you 10%. I don't wanna pay you 15, or the 20 that you're asking, whatever the case might be. But this regulation specifically is designed to cap that amount of money. Also, there is the potential for some pushback from people that are in the public adjusting industry, because again, who likes to have what they charge capped, right? It's sort of a bizarre thing. I understand it. And I definitely think that there is a need at times to have protections for consumers. But at the same time, if you arbitrarily slap price maximums or any type of thing like that on an industry, it tends to, you know, backfire over time. I mean, I'm looking at the insurance industry and there are times when insurance companies are basically just, and remember, they're private companies. These are not state run organizations or anything like that. And they're just arbitrarily told what they can or can't charge, whether it makes sense or not, whether it's based on profitability or not, whether it's feasible to charge that rate or not. I always use the example. Can you imagine if somebody went to, let's just say Toyota and said, hey, Toyota, we think you should charge 30 grand for your best top of the line Camry. Yeah, yeah, I get it. It might cost you more money than that. We think 30 grand is a good number and they pass a law and it just has to be that way. You would look at that and say, huh? But in essence, that's what some types of regulations do. They simply put an arbitrary cap on what an industry or an individual or a company is charging. Yeah, I'm not a super fan of that. Now, again, I understand the rationale. I understand that there is a necessity at times to kind of reign in some aggressive sales tactics, if that's the issue, but a blanket cap on costs, not really a fan about that, but I'd love to hear what you have to say. Give us a call if you want. Leave us a message at 559-656-0317, or send your comment into Questions@InsuranceHour.com. Time for another quick break. And when we're back, we're going to go over more of these potential laws. Standby. Ladies and gentlemen, boys and girls, in just a few moments, the WindowtotheMagic.com theme parks and resorts. And this is the place where you get to use your ears to surround yourself with the magic. For your safety, please remain seated while listening to the WindowtotheMagic.com Podcast. Maybe there's a name for this, something like Disnotic Obsession. Surround yourself with the magic! please visit WindowtotheMagic.com for more information, or you can find us on Apple Podcasts and in the iHeartMedia app. Hello, hello, this is Insurance Hour. I am your host, Karl Susman. Thank you so much for being here today. We are talking about all things insurance and in this particular show, we are talking about 10, count them. One, two, three, four, five, I sound like the count. Count them, 10, 10 new laws. 10 laws that are being discussed right now that will impact the insurance industry. Our phone lines are not open live, but you can still give us a call, give us your feedback. That number is 559-656-0317, or send your questions or comments in to Questions@InsuranceHour.com. And if you don't know what that reference was to, that was the count from Sesame Street, and you are clearly too young to be listening to anything other than Sesame Street. Okay, let's go. The next law that they're talking about, this is called the Eliminate the List Act. That doesn't sound too ominous, does it? Okay, the sponsor is Senator Ben Allen. The purpose is to require insurance companies to pay wildfire survivors 100% of their contents coverage without the necessity of a detailed inventory list. And it grants consumers six months to provide proof of loss following a state of emergency. Little bit of color on this for you. Insurance policies, as you know, they're just contracts. And in the contract, it says that when there's a loss, you have to provide certain information to the insurance company. And that's the way it works. Now, when we have large-scale disasters like this, all of a sudden, people like to try and backpedal and change what the contracts say. That is what the contracts say right now. What this is looking to do is expand on what the Department of Insurance has already begun. The Department of Insurance has put out bulletins that say, hey, look, we understand that the contract says you have to give us a list. We don't want that. We just want you to pay 100% of what the limit was for personal property, period. Mic drop, boom. Ah, again, don't like changing the rules after the fact, but that's what the department has done and they have asked carriers to do it and carriers are stepping up and doing that. What this potential legislation would do is it would make it the law. It would basically say that, hey, look, when there's a, again, if we look at the wording, it looks like it's targeting specifically wildfire losses, and that would mean that they immediately get 100% of the listed contents amount on their policy. My first question, of course, is, well, if we think that's important to do, then why are we only doing it when it's a wildfire? What about a kitchen fire? What about any other type of a fire? I don't know. I guess wildfire on the brain, that's what everyone wants to be talking about, right? So that's my first question. The next question I have in concern, well, actually, you know what, let me get into the pros and cons and then I can dissect it with you a little bit more because I think it's an important one because we're already dealing with it to some extent based on the bulletins from the Department of Insurance. So some of the pros say that they would simplify and expedite the claims process for disaster victims. No question about that. They also say it would reduce the emotional and administrative burden during recovery. There is definitely an emotional savings there because I've talked to clients. They've just lost everything. Their house is gone. Everything inside is gone. And to be told they have to turn around and make a list of everything that was there, yeah, that's a little bit tough. It's an emotional nightmare to have to do and telling them that, well, go look at pictures and videos. It'll help you remember what was there. That doesn't really make it feel any better. That might actually be making it feel worse. So there's no question that it is an emotional burden. Finally, they're saying that it would provide flexibility and time for policyholders to document losses. Well, six months is a long time for you to not know if your house is a total loss or not, but that's what's written. Now, let's talk about some of the potential shortcomings. One, insurance companies might face challenges in verifying claims, right? Now, you're supposed to just get back what you have, right? You're not supposed to be in a better position after a loss than before. The concept of indemnity is to put you back to where you were before, right? So if you have a policy and the policy says, well, we need to be sure you have these items and then you'll get reimbursed for them or you'll get paid for them, that makes sense. If we're just arbitrarily saying, well, if the policy limit is that, you get the limit, even though you might not have had it. Well, that could potentially be a problem. There's something called a moral hazard where, well, if you're better off after a loss, are you to do whatever you can to prevent the loss or not could be a problem. There's also the potential for there to be an increase in fraudulent claims. Simple, right? If people think that, boom, if there's this type of a loss, they're going to get the limits on their policy the next day, period, end of story, they're going to probably look to carry larger limits than they actually need. And guess what? If that's the case, the insurance carriers are going to end up, it might not happen overnight, but it'll happen eventually having to balance out what they're charging for that coverage to reflect the fact that it's no longer being verified. It's just an absolute, here's the money, goodbye, have a nice day, because that's not the way the contracts currently read. That's not the way the contracts currently are priced. So a bit of a double-edged sword there, right? Kind of be careful what you wish for. If we end up getting that, then it's possible that the rates will begin to reflect that additional exposure. All right, let's go on to the next one. the California Community Fire Hardening Commission Act, sponsored by Senator Susan Rubio, Dave Cortese, and Harry Stern, the state of purpose, the creation of an independent statewide commission within the Department of Insurance to develop an effective inspection system, enabling individuals to receive insurance discounts for home hardening and improving wildfire safety in communities. Some of the pros they claim to encourage community-wide adoption of fire-resisting measures, potentially lower premiums for compliant homeowners, and promote standardization and safety practices. Well, yes, those things could all potentially happen. This was a little bit challenging on the cons. Establishing and operating a commission requires funding and resources. Also, homeowners may incur costs based on those standards. And finally, the implementation could potentially be a regulatory nightmare because now you're going to have non-insurance people, non-wildfire specialists, just people, elected officials, that basically are going to say, well, we think if you do X, Y, and Z, it will make your home less likely to burn. And by the way, insurance companies give a discount for that, even though it might not be actuarially sound, even though it might not actually lead to a less likely fire event. So I think this one might have some tweaking and it definitely needs to happen to be able to ensure that if we're going to be going out there and marching around saying, if you do X, Y, and Z, number one, you're going to make your house less likely to burn. And number two, we're going to force a private company to offer you a discount for it. I think we've got some potential problems in there. I don't understand why we tend to feel like we have to force things to happen when the free market will make things happen anyway. I digress. Speaking of digress, you know what that means. It's time for another 60 second break for me to have a sip of coffee. And then we will be back. We've got more laws to talk about. This is insurance hour. I am Karl Susman. Thank you for being here. Stand by. We will be right back. Have you been dropped by your insurance agency or senior premium skyrocket? Susman Insurance is here to help. We're a family-owned and operated insurance agency that's been serving our community for two generations. At Susman Insurance, we know how stressful it can be to find the right coverage, especially when prices go up or you're left without insurance. That's why we're committed to finding you competitive rates, whether it's for fire, home, earthquake, flood, auto insurance, you name it. We've got you covered. Give us a call or send a text to 310-820-5200 or visit us online at Susmaninsurance.com. Plus, stay updated on all things insurance by joining our text group. Just text 567-4-Karle-with-a-K. That's 567-367-5275 to get the latest updates straight to your phone. Susman Insurance, your family's insurance solution. Hello, hello, this is Insurance Hour. I am your host, Karl Susman. Thank you so much for being here today. The phone lines are closed, but they still want you to call and text and give us your questions about insurance and comments about these new laws that we are talking about today that will be coming to a Sacramento office near you. That phone number is 559-656-0317, call or text, or send your email to Questions@InsuranceHour.com. Today, we are going over 10, yes, 10 potential new laws that are on the books to be discussed up in Sacramento by our elected illustrious people to see about helping us in our insurance industry. Number six on the list is called the Deceptive Disaster Relief Advertising Act. Whoo, say that 10 times fast. Sponsored by Assemblymember Health Flora, and it is, the idea behind it is to mandate. that advertisements for disaster recovery services clearly display the statement, this is a solicitation for business not affiliated with any government entity or nonprofit to protect consumers from misleading advertising following natural disasters." Let me give you the pros and cons, and I'll give you some real-life stuff with this. Some pros, of course, enhancing transparency in disaster-related services in advertising, good thing I'd think, protects vulnerable consumers from potential scams, definitely, and promote ethical business practices in the aftermath of disasters. Yes. Again, why don't we just have ethical people in business? I don't know. Cons, businesses may incur additional costs to update advertising material. Enforcement of compliance may require additional regulatory resources. It's a possibility. and could lead to legal challenges regarding advertising regulations. Again, I started saying earlier today that I don't like when we force private companies and industries to do things, and I do not. And then you have a regulation like this, you say, yeah, but this is kind of cool, isn't it? Because what harm is there in having them just add this language? Well, people are getting scammed out there. There's no question about it. There is a need to be able to change the way in which people go after people after large disasters like this. I've seen it too many times. I've seen the tricksters out there, the fraud and the scammers that are out in droves taking advantage of people that are being affected by the wildfires. I wish it wasn't, but it was. I don't know if simply adding language to an advertisement is necessarily going to solve the problem. I think it wouldn't hurt potentially. But again, I don't understand exactly why we think that by simply notifying someone of what it is that they are getting, or what it is that they're signing up for, the industry's going to do that anyway, right? I mean, if somebody is signing up for something, but they might not sign up if when they first saw the ad, there was special language, I don't know. I really could argue this both ways because I like the idea of the consumer protection. I don't like the idea of forcing language onto a private business and a private industry. Of course, then you say, well, what do you think about the cancer warning on cigarettes? That certainly was not done voluntarily. Ugh, don't get me started. All right, you ready for the next one? Let's do the next one. Number seven, the California Wildfire Public Model Act. The sponsor is Senator Dave Cortez, the purpose to establish the nation's first public catastrophic model for wildfires, providing a crucial tool to assist in wildfire planning, I'm sorry, planning and transparency. Now, the advantages to this is to potentially improve the accuracy in assessing wildfire risks. Here is the problem, the cons. The cons of this, again, is we're in a situation where we're having the elected officials come up with insurance type of actuarial figures. We're basically asking our elected officials to all of a sudden become scientists and actuaries and mathematicians and climatologists. Is that a word? Did I just create a word? Let me know if that's actually a word. I hope it is. It sounds like a word. But we're basically turning around and we're trying to create something with potentially the wrong parts. I don't have a problem in concept with there being a public model for wildfires. However, that should not be, and this is the slippery slope, that should not mean that an insurance company, again, private company, can turn around, has to turn around and use that model. Why would I do that? If I'm an insurance company and I spend all of this money to have all of our people run models and do all these things and then I'm told, well, you can't really use any of that research that you've done. You have to just use our research and go with that. I don't see how that's going to really end well for anybody involved, especially because historically public models of things don't tend to work out to be the most accurate. And again, I don't want to get into this. I'm not looking to bash any particular utility, but let's face it, sometimes private industry will do better than the government at doing certain things. Certain things, yes, just certain things. But when we're talking about creating something that would impact the entire insurance industry in the state of California, mind you, this is for a reason it would be if this law went into effect the way it's written. It's even stated the first in the nation of a catastrophic model. Well, the first in the nation tells you that none exists now, which might tell you something right away, that maybe there's a reason we have not done this before. Maybe this is not a way to try and fine tune our risk exposures in the state. This is not really the best way to figure out what's the likelihood of there being a loss or not. You follow me? So I'm always a little bit concerned and there's two laws now that tend to do this where the government wants to say, hey, we can figure this out. We're gonna come up with the right numbers. We're gonna come up with the right language. And then every private company that wants to play in that sandbox, they have to follow our rules. I had a problem with that just at its inception. So how would this, could this be better? Well, if industry experts were brought in for this and as the most important point, as long as it becomes something as a... more of a barometer to measure against other models. It doesn't become the only model that you can use. It doesn't become the de facto standard model that everybody, all private insurance companies have to go by. Because again, you would not want to do that if you were an insurance company. I would want to do that if I was an insurance company. I would want to rely on my people. I would not want to rely on your people. Don't forget, carriers have to decide if they're going to take a risk or not, whether they're going to write a policy or not. And they look at all sorts of things to make that decision. They do not want to be forced to look at information that they did not gather themselves, right? Makes sense, you know, and the cynic in me says, well, that's because they want to be more conservative. Well, if that's what they want to do, they're going to write less business, competition will pick up, other companies will write that business. So no harm, no foul. Speaking of how harms and fouls, we've got another break and then we are back with our next two. Laws to look at. Insurance hour with Karl Susman. That's me. Stand by. Ladies and gentlemen, boys and girls, in just a few moments, the WindowtotheMagic podcast show will begin. My name is Patrick. My name is Calvin. I'm Mouseketeer Greg. My name is Paul. And I will be your guide through the wonderful world of Disney sound experiences. This show is a weekly trip into the world of the Disney theme parks and resorts. And this is the place where you get to use your ears to surround yourself with the magic. For your safety, please remain seated while listening to the WindowtotheMagic.com podcast. Maybe there's a name for this, something like Disnotic Obsession. Surround yourself with the magic. Please visit WindowtotheMagic.com for more information, or you can find us on Apple podcasts and in the iHeartMedia app. Hello, hello. This is insurance hour. I am your host, Karl Susman. Thank you so much for being here today. We are talking about potential new laws that our people in Sacramento are discussing that we all need to know about so we can get involved and have our say. Meanwhile, the phone lines are not open, but they would definitely love to get your calls and questions anyway. That number is 559-656-0317. You can call or text that number or send your questions in to Questions@InsuranceHour.com. Before I go on, I want to make one quick point. My goal with this program is to help educate people about how insurance works, but I'm only human. I know it's shocking, but it's true. I'm only human and I might not always get it right. So. if you hear something and it just does not sit well with you, you're like, I've just heard otherwise, or that just does not seem to make sense to me, then I want you to do the right thing. I want you to shoot me an email, give me a call and let me know. This is not about my ego. This is about me trying to get the right information from me to you. And if it's not for me, from somewhere to you, the right information, the most updated information is always the goal. So if you hear something and it doesn't seem right, let me know. I will always, always do the best that I can, but I can't always get it perfectly spot on. So again, let me know my goal, the right information. And if that comes from someone else, I'll be the first one to step up and say, hey, you know what? I screwed up on this. Here is the right information. All right, enough said. All right, let's get on with the next couple of laws that they are discussing. You ready? This is going to be near and dear to a lot of our hearts. This one is called the Insurance and Wildfire Safety Act. Yes, please. Let's see what this is about. The sponsor is Assemblymember Damon Connolly. The purpose is to mandate that future insurance commissioners assess and update wildfire safety regulations based on the latest fire science and public input. Interesting, let's see what the stated pros are. It ensues that wildfire safety regulations remain current and effective. Well, we definitely want that. We do not want to get into a situation where our laws are 30 years old before they're looked at again. The next one is that it would incorporate scientific advancement and community feedback into policymaking, always a good thing, and enhance public trust through transparent and responsive governance. Well, I hope it would create that. It's always hard to know how people are going to respond to new laws. Some of the potential cons are that regular assessments may require additional resources and funding, a.k.a. it might cost money to do this. No kidding. Frequent regulatory changes could pose challenges for compliance by insurance companies and homeowners. Well, yes, but unfortunately, that just might have to be the way it is, right? If we want to have a competitive market, if we want to have our rates go down, we are going to have to be nimble and move with the science. And finally, potential for political influence affecting the objectivity of updates is definitely a concern. Remember, in California, our insurance commissioner is an elected position, right? So is there going to be certain actions taken by the insurance commissioner that you might say are politically driven? Yeah, I think that's certainly a possibility because they're an elected official. Fun fact, other states, I believe there are eight or 11, I always forget which states that have an elected... insurance commissioner. The rest of the insurance commissioner is appointed by the governor of the state. Which way do you think is better? I'd love your input. Do you think it's better to have an insurance commissioner that's directly elected by the people or one that's appointed by the governor who is elected by the people? Let me know what you think, 559-656-0317 or Questions@InsuranceHour.com. Are you ready for the next one? Let's get on with it. The Fair Plan Stability Act. Well, what could be needed more than that right about now? Sponsored by Assemblymember Lisa Calderon and David Alvarez. This is designed to strengthen the California Fair Plan by allowing it to assess catastrophic bonds through the California Infrastructure and Economic Development Bank, providing additional financial support to pay consumer claims promptly after disasters. I'll get into this in just a moment, but let me give you the quick pros and cons. Pros being to enhance the financial stability of the state's insurer of last resort, ensures that timely payments of claims are made to policyholders after large disasters, and to reduce the financial burden on private insurers and by extension by consumers. And some of the cons, assessing catastrophic bonds may increase the state's debt obligation, potential for higher costs associated with bond insurance and interest payments, and finally, may require complex financial arrangements and oversight. Look, when there's a large disaster like this, we want to be sure that there's money. We want to be sure that the money is flowing and is available for the policyholders right away. And if that means we have to do a little bit of financial tinkering to be sure that a bond can be issued through an organization or a part of the state treasury to be able to be sure that money is quickly available, then I think that's something that's important to do. Remember, this is not money being spent by the state. This is a bond, okay? This is money that they're cashing in basically to have immediate liquidity. This is not something that your tax dollars are all of a sudden going to be paying more for, or your tax dollars will be going to pay. This is a bond, right? This is the way to get immediate liquidity. This is a very interesting potential law because I think that one of the things that I think we've all learned after this last state of disasters that we've been having is that liquidity is a big deal. It's not just about is the insurance company going to be there when there's a loss. It's how quickly can they be there with their pocketbooks after a loss. I've seen millions of dollars getting EFT transferred from insurance companies directly to consumers after these wildfires. It is stunning, and I have to tell you, minus a few exceptions, that's the norm. That's what I've seen. I am proud to do it. what I do, seeing how quickly carriers are finding a way to get money to consumers that need it. Now, is it perfect? No. Is it definitely better than most people are talking about? Absolutely. Because you always hear the problems. You always hear the people complaining that are having issues. You don't hear the happy people posting on the social networks saying, wow, I got my money so quickly. No. You don't hear that. You're only going to hear about the problems. But let me tell you, working with probably three or four dozen insurance companies, I can tell you that money is flowing. And if it turns out that a bond is needed to help along some of the other organizations like the Fair Plan, for example, to be able to have immediate liquidity, then I think we should think about that long and hard because people, let me tell you, when there's a loss, you want to have money and you want to have it now. We're going to talk a little bit more about that. We have one more law. that is being discussed. We're going to talk about it after our break. This, again, Insurance Hour, I am Karl Susman, your host. Phone number at 559-656-0317, or email to Questions@InsuranceHour.com. Are you feeling lost in the search for the right insurance? Making call after call, only to find no one willing to go that extra mile for you? At Susman Insurance Agency, we understand that frustration, and we're here to change your experience. Where others see obstacles, we see opportunities. While many might shy away from jumping through hoops, at Susman Insurance Agency, we are prepared to leap. Looking under every rock, exploring every avenue, that's not just what we do, it's who we are. Our dedicated team doesn't just offer policies, we provide solutions, solutions born from persistence, expertise, and a genuine commitment to finding you the best coverage possible. We don't just meet expectations, we surpass them. If you're tired of hearing no or it's not possible, it's time to turn to a team that believes in yes, and let's make it happen. Don't settle for less. Reach out to Susman Insurance Agency at 877-411-5200. Visit us online at Susmaninsurance.com, or email sales at Susmaninsurance.com. Let's uncover the insurance solutions you deserve. Susman Insurance Agency, going the extra mile every time. Hello, hello, this is insurance hour. I am your host, Karl Susman. Thank you so much for being here and learning about your favorite topic and mine. Insurance, you know what? We're the supermen at this point, the superwomen, because we're the ones that are there right now being sure that the money is flowing to the consumers. I know you're probably not hearing great stories because everyone likes to complain. People don't like to share positive experiences, that's just human nature. But let me tell you, doing what I do, I am proud of the industry that I work for right now. I am proud to see the money get into consumers as quickly as it is. And I know you're probably hearing that. And you're like, oh, this guy's full of it. He's an insurance guy, blah, blah, blah. My job, my job, I don't work for an insurance company, okay? I work for consumers. My job is to find insurance policies for consumers, for my clients. And by extension, those carriers need to cough up the bucks when there's a loss. So when I'm telling you that I'm seeing that happening, that's coming from a place of reality. It's what I'm actually seeing. Your mileage may vary. If you're having problems, there are avenues you can take to get assistance. But I'm telling you, from my little world that I see here in Southern California, I am seeing more money being paid out than problems happening. Now, we're talking about one more law that is on the books being discussed up north in Sacramento. Let's talk about it. It is called the Savings Accounts for Mitigation and Catastrophic Act. Sorry, I misspoke. The Savings Accounts and Mitigation and Catastrophes Act. Whew. Again, sponsored by Assemblymember Lisa Calderon and Mike Gibson. The establishment of a tax-exempt savings account for homeowners to set aside funds specifically for home hardening measures and insurance deductibles providing proactive disaster preparedness. All right, pros and cons. Some of the pros encouraging homeowners to invest in preventative measures, potentially reducing disaster-related damages. That would be nice. Provide financial relief by offering tax incentives for disaster preparedness. I just love that sentence. I'm gonna say it again. Provide financial relief by offering tax incentives for disaster preparedness. Okay. And may lead to lower insurance premiums due to a reduced risk profile. I like that too. So you're doing things to make your house stronger. You're less likely to have a loss. You're going to pay less for insurance. Everybody wins. Some downsides. Homeowners must have sufficient disposable income to contribute to these accounts, right? You gotta have the money to take the tax deduction and spend the money on your home. Tax exempt status may reduce state tax revenue. Yes, we're going to have less money coming in to the state of California's coffers. I don't worry too much about that being the fifth largest economy on the planet. I think if we have to sacrifice a little bit of money in the bank to be sure that our residents are safer, that's probably a good investment. And finally, the effectiveness depends on homeowners' participation and awareness, which is always the case, right? A law is only as good as the people that take advantage of it if it's going to be a law that's going to potentially put money in your pocket to do things to make your home safer. There was also some regulations that I remember seeing last year that did not come to fruition, that I'm hopeful will again. It's a similar law, but instead of. there being tax benefits for putting money away to make your home safer. It was simply a deduction for your insurance premium. I'm hoping we're going to see that one again, because I think as we see risks increase in California, and don't pretend they're not, we are going to be seeing higher risks in California because of climate change and these weather patterns and everything else that's simply costing a bloody fortune already, that if we have the ability to deduct that, then people are going to have to be able to look at their finances in an entirely different way, because now your insurance premium is a true expense that you can capitalize on. And again, to the detriment of the California state budget, I think we can find ways to make that work. If we can find ways to get more money into the hands of consumers, and that means that the government's going to have less money, that's probably not going to be a horrible thing in the short term. or the long-term because again, in California, we are so big. We have so much industry and we are going to continue as time goes on. I think that we will always be able to make up for any potential loss in taxation income that the state has. There are plenty of other avenues that Californians get taxed. If you live here, you know what I'm talking about. Lots and lots of them. So I tend to like any kind of a concept that gives you a tax deduction. Let alone a tax deduction that's going to make your home safer which could in turn make your insurance premium lower. And then if you add onto that the potential to deduct part of or all of that insurance premium. Now we have a win-win and a win. We have safer homes, we have more money in your pocket and we have the ability to have lower premiums on top of it. I think something more holistic along those lines is something that we could really all benefit from. And personally, I'm going to reach out to Assemblymember Calderon and Gibson who I know actually and talk with them and see about adding this concept of having portion of your insurance premium tax deductible as well. It seems like it might be a nice mashing together of two concepts. And if we're dealing with the financial, the finances then you might as well do it right. Do it all in one and not have to have a separate bill and have to go through all sorts of committees and everything else after that, all right? Now let me leave you with this. The wildfires are going to be the most expensive disaster in the history of this country, all right? Let that sit. The most money will be paid out than in any other disaster. Guess what? Your claims, if they should be and the contract states it will be paid. That I can tell you from everything I'm seeing. But don't kid yourself into thinking that somehow magically your premium. is not going to increase over time. If your premium doesn't increase after the largest disaster in the nation's history, when would it ever increase? When would it ever be justifiable to have your premium go up than if it's right after a time when the largest payout from insurance companies and the insurance industry had happened? So don't kid yourself, but take advantage of all of the discounts and all of the opportunities to lower your premium, and I will be here with you every step of the way. This is insurance hour, I am Karl Susman, and we will talk again soon. Take care. I do want to thank all of you for taking the time to listen today. I know insurance is not necessarily the most sexy concept. It is important that you understand what it is you're looking for, what it is you think you're getting and finally what you actually did purchase. You simply need to know more than you used to. Things are more complicated. If you have any questions, please reach out to me directly at 559-656-0317. You may also send your questions to Questions@InsuranceHour.com. Informing, educating and entertaining one policy at a time, this is Insurance Hour. The show is dedicated to Shamrock Papa.