California's approach to jaywalking changed with the Freedom to Walk Act, which narrowed when a pedestrian can be cited for crossing outside a crosswalk. The exact scope of that law is worth confirming, but the key point for an injured pedestrian is that crossing outside a crosswalk is not the automatic bar insurers suggest.
Even where a pedestrian was crossing improperly, a driver generally still has a duty to keep a lookout and avoid a collision. And under California's pure comparative-fault rule, being partly at fault reduces a recovery by your share rather than eliminating it.
So the question usually becomes how responsibility is divided between the pedestrian and the driver, based on speed, visibility, and each person's conduct — decided on the facts, not by the insurer's assumption that the pedestrian was entirely to blame.