Alas, not. Most policies in California have a 15% deductible. That’s 15% of the insured value of your home. So for nearly all houses, a $25K bill is not covered. California policies are and have always been to cover catastrophic damage.
Making the insurance executives ultra-rich.
Insurance agencies serve primarily as vendors, customer service, etc., but the risk is carried by the CEA. The remaining 1/3 of policies are carried by a few private insurers who still underwrite policies.
In theory, that system should prevent insolvency. Remember that California is a huge state and even a very strong earthquake would still have fairly localized damage. For example, the 1906 earthquake (Richter 8.0) that levelled San Francisco did comparatively little damage to Petaluma, a city 40 miles to the north.