Firefighting makes the next fire worse. You need to have a theory that doesn't involve more expensive fire fighting every time someone builds a new house. This is general means defending towns and letting the mountainside burn.
If insurers were allowed to and incentivized to price accurately, homes in dangerous areas (flood plains, fire hazards) would be too expensive to buy, and people... wouldn't.
Especially given that if you can't get insurance, you can't get a mortgage, which drastically limits your buyers.
Is this caused by regulations or the insurers approach?
Genuinely ignorant here.
Artificially forcing blended home insurance rates lessens the pricing signal that this particular area might be too risky to build in.
At the end of the day, it's developers and the city/county making money while offloading the risk to insurance companies and government mortgage buyers.
The same has happened with auto insurance rates (men and women have different accident rates, so used to have different rates), and, glaringly, medical insurance rates.
The problem is people come to the legislature screaming about being charged a rate that actually reflects the risk. The legislature eventually responds by making insurance spread the costs over it's policy base. This results in people to screaming to the legislature because their rates are skyrocketing to pay for the idiots in the danger zone. The legislature eventually responds by not allowing insurance companies to charge enough--and they walk.
By the time you reach the point of the insurance companies walking you've already had many chances to fix the problem. But we never learn, people are determined to have their cake and eat it also.
Our house is not fire engineered--but still it has very few spots that could ignite. That's simply because we have stucco walls and a concrete tile roof. There is some exposed wood but not much. Nor are the vents spark proof.
Unfortunately, concrete tile roofs aren't suitable in many places (they don't like hail) and can't be retrofit onto most houses due to the weight.
Even in the case of an emergency firebreak, if there aren't enough firefighters to cut one large one, there aren't enough firefighters to cut lots of small ones with a greater total length.