Speaking as an insurance exec here ... the context here is that before you can raise rates, you have to submit a justification for your rates to the state DOI for approval. You have to tell them how much you expect to pay out for all these different perils, and you have to show your work, i.e., you have to explain in nauseating detail how you arrived at those numbers. That's the case for pretty much every state, but in CA, when you file for DOI approval, you're only allowed to use actual past data: you can't include models that try to guess what the future will look like. So yes, you have to aggressively pretend that those models don't exist.

Now, of course, those models do exist, and insurance companies run them. But when those models tell them, "You need to charge $3000 for house X to stand a decent chance of making money", and the filed rates will only allow them to charge $1500, the only options are to not write the policy, or to write it, but exclude fire. Which is why the state FAIR program is so big - and of course, which is also why it's about to go bankrupt.