The insurance companies are reinsured, though they will threaten with leaving the state if they cannot increase rates, so we all pay, or will be bailed out by government, and again we all pay.
I used to think that in valuable markets, where 70% of the value of the property is the land, you get the 30% from insurance, and rebuild the house you really wanted to live in! I saw that when La Jolla had mud slides that condemned entire blocks... I thought Malibu would be like that. I am afraid I was wrong. First, many people inherited houses and are paying taxes limited by prop 13, the houses date back as far as the 50s. If they rebuild I hear the taxes are reassessed to market value, and they cannot afford that. Plus the permitting process with today's rules will really slow things down. If they take the 30% and buy a house elsewhere they have to also sell the land, and now is not a great time to sell. Else they will have to rent or move to a place where 30% of the old house buys a full house...so what does the crystal ball show? Most owners will not rebuild, corporate capitals, realizing the prime location value long term, will buy land and spawn projects, probably less units but higher end, or policy makers will push for less density and the state may buy some of the land. That is my grim outlook today, but every crisis is an opportunity says a slogan that I hate like all slogans.
My son started a job in LA on Monday. He drove back home on Thursday and is waiting to see if they need him back in person on Monday. He would drive back whistling Leonard Cohen's Boogie Street I guess:
I’m wanted at the traffic-jam
They’re saving me a seat
I’m what I am, and what I am
Is back on Boogie Street