I still don't follow.
If I'm reading it right, and the prior context, we shouldn't allow private insurers to charge the prices they want for insurance?
What do you want us to do? Ultimately someone has to pay for the bad outcomes happening here - either that's homeowners in risky areas, insurance shareholders or the general taxpayer, depending on where you fall.
If you don't make the ultimate originators of the risk pay for it (people in risky areas) they won't stop doing the stupid thing and others will bear the cost. Arguably that is the greatest strength of the "free market" - directing the efforts of everyone in the same, positive, direction.
Because although in the recent LA case we're dealing with rich folks who could shoulder the increased burden, often it's the poor areas that are riskier, and where the people there have little choice over where they can live.
There's no universal solution. A "free market" approach will work in some areas, and fail spectacularly in others. Same goes for a full-on centralized control approach.
And in all cases, you also have the confounding factor of bad actors gaming the system - and your current tools may be insufficient to meet the challenge.
So you need a human guiding hand to make sure things don't go too far out of whack.
This isn't an either-or decision. Stability doesn't care about whose motives or approaches are more "pure".
Agree to disagree.
The "human hand" guiding outcomes still needs to get it's resources from somewhere, presumably from government tax income. I disagree this will necessarily result in better global outcomes than the free market.
In cases where almost everyone agrees people should always have access to a service (healthcare) I think it does make sense to obligate everyone to pay. I don't think it makes sense in this specific case of wildfire insurance.
The free market here seems to be failing by your definition because it can't make money. To me that's it succeeding. It's demonstrating that it's underpriced, and people being unwilling to pay the necessary prices shows that they need to find somewhere else to live.
Amusingly enough, the lack of housing itself is another problem caused mostly by human-guided hands in government, not the free market. Enlightened despotism always sounds great when they agree with your perspectives, the reality is rarely so smooth.