Florida and California Have the Same Issue with Different Hazards

Of any business entity, property insurance companies understand risk. This is why they have largely backed out of insuring properties against hurricane damages in Florida and earthquake damages in California. Governments then step in to fill the gap. How wise is that? You tell me. I'm thinking it is about needing to fuel the building industry so as to stoke the economy. Not having insurance would be a "Debbie Downer" for business development.

There is this quote from the 2021 National Preparedness Report from FEMA.

THE CALIFORNIA EARTHQUAKE AUTHORITY

The California Earthquake Authority (CEA) was created in 1996. Issuing about two-thirds of the residential earthquake policies sold in California, it is the largest residential earthquake insurer in the US. In addition to earthquake insurance, the CEA also manages the state Wildfire Fund. The CEA is a nonprofit that is privately funded and publicly managed by a five-member board that includes the state’s
governor. It was born out of necessity, after insurance companies cut back on issuing new policies in the state after the 1994 Northridge Earthquake. CEA uses about 53% of the funds it takes in to purchase
reinsurance, pay contracting fees, and accumulate capital. insurance is spread among 127 reinsurers that together provide $9.2 billion in coverage. CEA also obtains reinsurance through the capital market,
such as through catastrophe bonds. These purchases are grouped under their transformer reinsurance program, which is notable due to its structure; CEA has created a repeatable process with uniform
documentation, which has eased the complexity of transactions of this nature. As of December 31, 2020, CEA reported $2.125 billion of sources under the transformer reinsurance program that are
available to pay claims."

The above is "a solution." Is it the right solution?