Key pieces of Friedberg’s scenario have partially materialized, but the full chain he described has not clearly played out by late 2025.

1. Big losses and stress on state‑backed insurers
– California’s FAIR Plan (insurer of last resort) took massive losses from the January 2025 Los Angeles wildfires and has paid out billions in claims, ending up with an estimated ~$800m deficit and requiring a $1b assessment on member insurers. (reuters.com)
– Florida’s Citizens Property Insurance Corporation projects a record net underwriting loss for 2024 after Hurricanes Helene and Milton, but still expects to rely on its surplus, reinsurance, and (if needed) policyholder surcharges and emergency assessments, not an immediate state budget bailout. (spglobal.com)

2. Who is actually paying the shortfalls?
– In California, the FAIR Plan is explicitly not funded by taxpayers; it is a pool of private insurers. Deficits are handled via assessments on those insurers and temporary surcharges on policyholders statewide (roughly a one‑time ~$60 charge per homeowner for the current assessment), rather than through general tax revenues. (gov.ca.gov)
– California did pass a $2.5b state disaster‑relief package after the LA fires, but this spending is for emergency response and rebuilding support, not a direct bailout of underpriced state insurance schemes. (apnews.com)
– Florida law similarly contemplates Citizens covering post‑storm deficits first via surcharges on its own policyholders and, if needed, emergency assessments on most property‑and‑casualty policies statewide. Those are effectively levies on insureds, not general‑fund taxpayer bailouts, and there is no report yet of a 2024–25 Citizens deficit being covered by state tax dollars. (citizensfla.com)

3. Taxpayer backlash & legislative reforms aimed at ending subsidies
– There is visible consumer anger in California about FAIR Plan surcharges that would be borne by homeowners far from the fire zones, and lawmakers have scrambled for alternatives, but this is framed as opposition to statewide premium surcharges and insurer bailouts—not a broad taxpayer revolt over general‑fund spending. (latimes.com)
– California has moved ahead with substantial insurance reforms: the Sustainable Insurance Strategy and new catastrophe‑modeling rules, FAIR Plan modernization and financing tools, and a 2025 law to create a transparent public wildfire catastrophe model. These changes do tend to allow more risk‑based pricing and seek to stabilize the market, but they were largely initiated in 2023–24 and are not clearly presented as a direct reaction to taxpayers objecting to subsidizing others’ home values. (insurance.ca.gov)
– Florida’s big structural reforms—shifting litigation rules, lifting Citizens’ rate cap on non‑primary residences, and aggressively depopulating Citizens—were enacted in 2022–23, before Friedberg’s January 2025 prediction. In 2025 the state actually expanded homeowner subsidies through new funding for the My Safe Florida Home grant program, which helps pay for wind‑mitigation upgrades. (flgov.com)

4. Time horizon
Friedberg said that “at the end of the day” governments would have to “step in and pay the difference,” provoking taxpayer backlash that would drive reforms to reduce or end subsidies and push prices toward full risk‑reflective levels. Less than a year later, we do see:

• extremely costly disasters in California and Florida;
• severe financial pressure on state‑backed insurers; and
• ongoing regulatory and legislative changes that move toward more risk‑based pricing.

But as of late November 2025, there has not yet been a clear, large‑scale taxpayer‑funded bailout of these insurance schemes, nor an identifiable, taxpayer‑driven political moment that directly produced major subsidy‑cutting reforms. Because the underlying dynamics are long‑running and could still produce the scenario he described over the next several years, it is too early to definitively label the prediction as right or wrong.