Good question. Not about the claims process but about state programs being generally underfunded and not underwriting the risk properly. If multiple insurance companies cannot underwrite the risk properly, how can a state government do it any better and at a sometimes affordable price. Maybe everyone is baking in the idea that the state will just get a bailout from the federal government.

I also believe that it creates a perverse incentive for people to continue living in unmaintainable habitats. We also hear talk about how can these cities with no water continue to survive, its not maintainable etc. Well neither is living in a hurricane prone area or high fire risk area.

The options for these funds are often fairly limited too and not covering even 50% of the loss. YMMV.