Precisely. I don't think most Americans realize this. Through the past five decades I've litigated insurance related issues all over the country. This is going to hit hard nationally - possibly even internationally.

Insurance companies can't afford the risk of bad governing and poor planning. If government focuses on things like DEI, cultural competency, and LGBTQ hires -  as opposed to maintaining a razor sharp focus on things like infrastructure, including reservoir systems, water flow, fully staffed and well trained manpower  fire houses, pumps, etc. (you can't focus on both) - who bears the risk? Everyone, including insurance companies. Insurers can hardly afford the inflated costly rebuild materials  in California anyway, but moreso it's the excessive regulations that compound the cost of a rebuild AFTER a loss.  No sane enterprise, insurance related or otherwise, wants to be in a forced marriage with  low level incompetent bureaucrats manning the desks of  a local municipal codes department, FFS.
Working through the maze of regulatory bureaucracies that is California comes at incomprehensible costs to people who simply want to put up a building. 

Not only that, California regulations aggressively cap premiums and require approval of all rate hikes and in some situations may be required to participate in pooled payouts for disasters that the government-run home insurance program (FAIR) can’t cover.

As Ayn Rand  said in Atlas Shrugged:

"When you see that in order to produce, you need to obtain permission from people who produce nothing - when you see that money is flowing to those who deal not in goods but in favors - when you see politicians get richer by graft and by pull rather than by work and your  laws don’t protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed."