California has not allowed insurance companies to price individual units, but by zip code. If someone builds in a high risk area, they are effectively subsidized by surrounding low risk houses. Increased rates have also historically been limited by the state.

California also has a highly regulated insurance market that insurance companies have never liked, and many feel insurance companies withholding coverage is partly to try to get rid of regulations they don't like.

It's not just high fire risk people getting dropped, but people living in very urban areas.