They are betting on the federal government stepping in. It's somewhat understood that it's impossible to insure against natural disasters of that scale. The payouts for normal fires or car accidents in an average year is predictable over the claim term.
Natural disasters don't work that way. Insurance companies might go 10 years without a major claim, then suddenly there's a major disaster and 10% of their customers have claims that far exceed the value collected by the policies over several terms.
Natural disasters don't work that way. Insurance companies might go 10 years without a major claim, then suddenly there's a major disaster and 10% of their customers have claims that far exceed the value collected by the policies over several terms.