In the distant past, insurance companies used actuaries to price policies, so that the companies could make informed, rational decisions like "for people in this risk category, if we want to make X% profit, how much do we need to charge for that coverage?" Instead it became "insurance company M is charging $N for this type of policy, we have to charge something similar or else our customers would switch." Along comes Hurricane Andrew in 1992 and years of 'selling policies at a price point instead of using actuarial math to determine what the real cost would be' turned into a major disaster as it turned out that dozens of insurance companies were selling policies below the actual cost of those policies. Most of those insurance companies went out of business. 30 years later, and most insurance companies are still making bad decisions.

My point, and I think there is one in here, is that insurance companies have been making terrible decisions based on marketing instead of basing them on what the actual risks involved are.

California's fires and Florida's weather are a lot more risky than people are willing to admit. Some coastal states have passed laws prohibiting the consideration of climate change in insurance and governmental decisions. Those states are also seeing insurance companies performing strategic withdrawals from those markets. But they aren't as big as CA & FL, therefore they don't get the media attention.