They should do the same thing for flooding - from the Los Angeles Times:
After California's most destructive fire season, a debate over where to rebuild homes
After a destructive wildfire swept from Calabasas to Malibu in 1993, the head of the Santa Monica Mountains Conservancy stood on a mountaintop on live TV and made a radical proposal.
He called for a “three-strikes” rule to limit the number of times recovery funds could be spent to help rebuild a home destroyed by wildfire.
Today, Joseph T. Edmiston is still wincing from the blowback. But he hasn’t backed down. Just the opposite.
“I think two strikes is enough and they ought to be bought out,” Edmiston said, after spending three days coordinating the conservancy’s crews on the Skirball, Rye and Creek fires.
He’s not alone. With the frequency and cost of catastrophic wildfires climbing in California, the idea of compensating property owners to not rebuild — or using economic pressure to discourage them from building in the first place — is gaining supporters among those searching for ways to cut wildfire losses.
Makes perfect sense - why should other taxpayers have to foot the bill for stupid house location. I know it looks lovely there amid the trees but that is a huge fire-load and not a safe place to build. Same thing for riverbanks. To keep funding their rebuilding is just to encourage the stupidity. These people do have homeowners insurance but these fires (and floods and earthquakes) fall under the Act of God catagory and are not covered.
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