In this debate, it's worth remembering that there are two separate risks that are worth insuring against: 1) the risk of losing your home in a wildfire or natural disaster and 2) this risk and/or expected damage going up over time. I.e. the risk that the annualized probability of incurring major damage will go up, say, a decade from now, in the area where you happened to purchase your home. This can be due to environmental conditions, urban mismanagement, crime rates, etc.
A lot of people seem to automatically expect to be insured against the second risk when they insure themselves against the first, but it is not obvious to me that this should be so. At the very least, that should be written explicitly in the contract and priced accordingly. But I'm also not sure it is actually possible for an insurance company to reasonably price it, as this is not the kind of predictable, reproducible risk that insurance is usually well suited for.
> there are two separate risks that are worth insuring against: 1) the risk of losing your home in a wildfire or natural disaster and 2) this risk and/or expected damage going up over time
You're comparing risks and costs. The first is stochastic. The second can be almost completely controlled by renewal and rate-increase frequencies as well as coverage limits.
A lot of people seem to automatically expect to be insured against the second risk when they insure themselves against the first, but it is not obvious to me that this should be so. At the very least, that should be written explicitly in the contract and priced accordingly. But I'm also not sure it is actually possible for an insurance company to reasonably price it, as this is not the kind of predictable, reproducible risk that insurance is usually well suited for.