Insurers aren't perfect. For example, the Northridge earthquake was so expensive it caused insurance companies to exit the California earthquake insurance market. Now the state provides earthquake insurance with high deductibles.

I wouldn't be surprised to see wildfires go a similar route in California if the situation isn't resolved.

It’s already like that. Most houses in the Tahoe area that are surrounded by a certain amount of trees are insurable only via the California FAIR plan.

I keep waiting for the insurance war that will break out due to 'managed retreat' by the Coastal Commission.

As someone else said, it's easy to have either extremely high insurance rates or unavailable insurance if you live in the wrong area on someone's map. The result was FAIR plans with add-ons from insurance companies.