See Florida and California.
Governments 'interfere' because they want their residents/citizens to get value for their premiums. There have been multiple instances in which property owners don't get compensated because of some technicality (in reality it's because the insurers likely don't have the money to pay out all claims).
That's what people don't understand about how insurance works. Insurance will pay for an individual household destroyed by fire. The amount they collect in premiums creates a pool that can pay insureds out one at a time. In that situation, their overall financial health isn't endangered. Moreover, the payout reinforces the value of the premium in the minds of consumers, who think, I paid the premium. Something bad happened. I got what I paid for. All well and good -- at the individual homeowner payout level.
But a situation like Hurricane Katrina, Hurricane Sandy, Hurricane Maria, Hurricane Harvey, the L.A. wildfires, the Paradise, CA fires? That's billions in claims all at once. That stresses the market. Different story. They no longer care about the value of their premium; they care about whether they're profiting or not.
