If you had "decided to build out of fireproof materials and install a sprinkler system" then you would have paid significantly lower premiums on your insurance,

If you had "decided to build out of fireproof materials and install a sprinkler system" then you would have paid significantly lower premiums on your insurance, and the home is not worthless unless you decide to sell it soon. The price drop might be a bonus due to the insane CA property taxes.