> it’s ok if insurance is expensive - let it result in the insured goods or services having a serious price adjustment.

Long term, sure. In the short term, the rapid rise of housing prices combined with the increased rates and severity of disasters means the extra monthly cost would be enough to price a number of people out of homes they purchased when rates were much lower. While it's easy to say, "They should just move," that has huge transaction costs. Aside from the obvious things, which are already substantial, consider the cost of paying off a mortgage taken out a few years ago and acquiring a new mortgage at current interest rates. That can cost you hundreds of thousands of dollars (which shows up as now only being able to afford a much worse house, probably in a much worse location, if you can continue to afford to own at all), and you are basically gifting that money to the bank by paying off your loan early.

You can understand why such people would be willing to take a chance on not having insurance rather than incur a definite loss, and why it might be tempting to try to come up with some other solution than just unleashing the unrelenting might of the free market on them.