Im pretty skeptical of the underlying approach. Why starting with cost per capita and trying to control for everything instead of a more direct measure? Poor controls is cumulative error and taints everything else.<p>I suspect you would get a substantially different result if it was based public tax filing data for coverage.<p>My SWAG is that construction is a larger portion than estimated, and the <i>quality</i> of coverage is a major factor not captured in this model (fewer claims, higher price tag).<p>One thing the article overlooks is that the price of insurance is driven not only by payouts, but by investment returns and inflation rates. Insurers have liquidity requirements and restrictions on investment risk. I would expect insurance premiums to go up when returns on low risk assets like bonds and mortgage backed security returns are low, especially when inflation is high.<p>I wonder if many insurers were/are in a comparable financial situation to silicon valley bank holding underwater bonds, but with the benefit that homeowners can not coordinate a run on the bank.<p>I suppose we will learn more about the state of their liquidity and financial risk in the fallout from the SoCal fire claims.<p>Probably way too late to make options trades on this hypothesis. May be a opportunity to go long on firms with relatively less exposure (low growth since 2020).