[…]Even though Florida initially tried to block major national insurers from leaving, they left eventually, and they have continued to exit. Smaller, less solvent, more entrepreneurial insurers have taken their place. The national names you’ve heard of, State Farm, Progressive, and Allstate, all have puny market shares in Florida ranging from 3 to 7 percent as of 2023, according to S&P Global.

Similarly, now California will likely do what it can to keep insurers around, but they may leave anyway—or be replaced by less-desirable players. The California Department of Insurance reports that between 2020 and 2022 insurance companies declined to renew 2.8 million homeowner policies in the state, over half a million of which were in LA County, and that’s a trend that will be very difficult to slow. In the long run, both national and regional insurers will likely reshape their approach to the California market after they limp through the immediate claims-paying process (one that researchers for the Federal Reserve predict will include systematic underpayments on the scale of hundreds of thousands of dollars per household). To the extent nationally-known home insurance remains available, it may be expensive and provided in ways designed to evade state oversight—Bloomberg’s Leslie Kaufman has done extensive work explaining this phenomenon. Or it may be provided by smaller, lightly capitalized insurers willing to take short-term high risks in exchange for high premiums—the story in Florida.