Florida has a different flavor of market intervention. The state-owned Citizens Property Insurance Corporation, which has become the fastest-growing insurer in the state, serves about 17 percent of insured Florida homeowners. People are eligible for Citizens if the only quotes they receive from private insurers are 20 percent or more above the Citizens offer. But even Citizens’ rates are high (so as not to undermine the private market), so some people give up and go naked. About 15 percent of Florida homeowners have no property insurance, the highest share of any state, the Insurance Information Institute estimates.

In both states, the nightmare would be that insurance markets completely unravel and the state government has to take over completely. There is precedent at the federal level. In 1968, Congress established the National Flood Insurance Program because the private market wasn’t up to the task. Five years later, Congress started require flood insurance for people living in areas at high risk of flooding. Fares, however, were subsidized. Phasing out these subsidies was politically difficult. And taxpayers are still getting hit. In 2017 Congress forgave $16 billion in debt the program incurred so it could cover losses from Hurricanes Harvey, Irma and Maria. The program is looking for canceling an additional $20.5 billion in debt now. People who have been flooded repeatedly account for a disproportionate share of claims. In one caseA $69,000 Mississippi home was flooded 34 times in 32 years, resulting in $663,000 in claims.

Returning to California and Florida: Watkins, who is an actuary, told me that insurers need to know that when they put up for raising rates, “something reasonable is going to happen,” and customers need to know that “companies are going to pay their claims in the long run.” She added, “I think what California and Florida have in common is an unreliable environment.”

Michael Soller, the deputy commissioner for communications at the California Department of Insurance, told me the department held a four-hour workshop on July 13 on how to set rates. It looked at the two approaches that are common in other states: taking into account reinsurance costs and looking forward to assess risks, not just backward. The insurance commissioner, Ricardo Lara, whose position has been elected, has not yet decided if he is in favor. “I would say this is a top priority right now,” Soller said. “Everything is on the table.” Florida, meanwhile, is working to “displace” Citizens by having private insurers take over some of their clients.

Allowing private insurance companies to charge more would keep the market functioning, but it is politically difficult. “People just don’t like to buy catastrophe insurance,” Yanjun Liao, an economist and fellow at the think tank Resources for the Future, told me. “That is a fact that is documented around the world.” Governments want insurance to be both affordable and available, but when it is more affordable, it is less available and vice versa. “That tension is very difficult to resolve,” Liao said.

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