What's California doing to address the insurance crisis? The possible solutions and what insurance companies need to change

LOS ANGELES -- For many people, it's a frightening moment when they get their yearly insurance documents.

Suddenly, they're seeing huge rate increases - or worst - cancellations.

"Oh it's definitely a crisis, said Susan Bookheimer, who owns a home in Calabasas. "Every passing year, it's going to get worse, because people are having their insurance changed. You have a one-year policy ... when that one year comes up, everybody is now getting these terrible bills."

How can California bring down high insurance rates?

Experts say the obvious solution is to reduce the risk.

Former California Insurance Commissioner Dave Jones said the state is already doing a few things. For example, the state is taking better care of the forests, especially the ones that are close to residential areas.

"One thing we know for sure is that better managing of our forests, using thinning and prescribed fires, significantly reduces the risk of severe wildfires," said Jones.

He said after that, insurance companies need to change their risk models.

"They don't account for the forest treatment, so we're spending billions of dollars of taxpayer money treating the forests, but those homes and condominiums and businesses that are proximate to that forest treatment are seeing no insurance benefit, and that needs to change," said Jones.

Critics say insurance companies keep those models secret. They say the companies come up with their own formulas and only tell you if your home qualifies for insurance and what the cost will be.

There is no way to know too many details.

"One of the other things that we're urging the state to do is create a public model to look at climate risk in California that allows us to look at the local level at steps homeowners and communities and the state are taking to protect us from fire, so those are reflected in insurance rates as well," said Carmen Balber with Consumer Watchdog, a consumer protection organization in California aimed at safeguarding the rights and interests of consumers.

Jill Epstein, CEO of the Independent Insurance Agents and Brokers of California, said insurance companies are "very sophisticated" and say they can assess the risk.

"That's what they need," she said. "They need the rates to match the risk and that's where things have been kind of haywire in the last several years."

Los Angeles County Supervisor Kathryn Barger introduced a motion urging California Insurance Commissioner Ricardo Lara to investigate the compliance measures that insurance companies require from homeowners to keep their coverage.

"What we are asking is the Department of Insurance to work with the insurance industry so that we can do this in a way that is not going to negatively impact homeowners who are already facing higher costs, whether it be for their gas, their food ... so it's important for us to work together," she said.

Eyewitness News tried speaking with Lara. We asked for weeks for an interview, but were told he is not available.

Bookheimer said for now, she will pay the higher premiums and hope she doesn't get cancelled.

She wonders how long it will take to fix all of this.

"The cost of insurance has to make sense with the risk, and I understand the fire risk, people who live in more rural places will have to pay higher premiums for fire, but why for everything else?" she said.