Major rainstorms, flooding and wildfires have caused insurance companies to leave California, leaving residents with fewer options to get important coverage for their homes.

The driving factor for many of these companies to leave is they no longer can make a profit from their policies because of the changing climate.

That’s according to insurance expert Karl Susman, who sat down with “Inside the Issues” host Amrit Singh to discuss the future insurance market in California.

Susman says the intense climate events that have occurred in the state have completely gone against the current models that insurance companies use to calculate their premiums.

“We’re seeing storm patterns that have never happened before. In the last eight years, five of the worst wildfires in California have occurred,” said Susman.

California Insurance Commissioner Ricardo Lara unveiled a Sustainable Insurance Strategy that will allow insurance companies to use so-called catastrophe modeling to create premiums for households. 

Susman explains catastrophe modeling is essentially using many different data sets to create a customized premium for each policy. He says insurance rates could vary from house to house in the same neighborhood based on what climate protections people add on to their homes.

“If everything [Lara] has talked about comes to fruition exactly as it’s written today, everybody feels good about it,” Susman said.