The massive wildfires that have erupted in Southern California are still devastating the city of angels.

According to available reports, there are currently four large fires in the Los Angeles area. The fire in the Palisades area began as a brush fire on Tuesday morning and has now spread to over 15,000 acres. The Eaton Fire started in a forested canyon and, as of Wednesday, had burned over 10,000 acres.

Additionally, the Hurst Fire, which also began as a brush fire, has now grown to cover 500 acres. The Sunset Fire erupted near Runyon Canyon in Hollywood Hills, triggering mandatory evacuation orders.

Local officials have revealed that at least 70,000 residents have been ordered to evacuate, and nearly 30,000 buildings are threatened. Many Hollywood celebrities are also on the list of those affected. The famous Sunset Boulevard has been engulfed by flames, and several locations that have appeared in Hollywood movies have been consumed by the fires.

Due to the expected strong winds in the coming days, local communities are very concerned that the fires will continue to spread. The Critics' Choice Awards, scheduled for this Sunday, have been postponed until the end of February, and two movie premieres have been canceled. The filming of several TV series has also been delayed, affecting the entire Hollywood industry.

However, the halt in Hollywood production is not the main loss. According to preliminary estimates by JPMorgan Chase, the wildfires in Southern California will cause at least $10 billion in damages.

What is more concerning is that the insurance market in many areas of California has already deteriorated, with many insurance companies choosing to exit the state over the past five years. This means that there are very few reliable risk-sharing mechanisms for the huge losses caused by this disaster.

President-elect Trump is very concerned about this issue. On Wednesday, he stated that, in terms of financial impact, the Los Angeles wildfires could be the most severe in U.S. history, and many people are questioning whether insurance companies have enough funds to cover the claims for this disaster.

According to AccuWeather's estimates on Wednesday, the losses from the wildfires could be between $52 billion and $57 billion, and the hurricanes on Wednesday and Thursday could further increase the scale of the losses.

Additionally, according to California government documents, private insurer State Farm canceled nearly 70% of the home insurance policies in the Palisades community last year. This was partly due to the much higher fire risk in the area compared to other regions, and partly because of California policies that continue to suppress insurance rates.

This has led many families to seek protection from the state's last-resort insurer, the FAIR plan, but its prices are prohibitive for many residents. Nevertheless, in the Palisades area alone, FAIR has provided protection for nearly $6 billion worth of property, and its total insured property value in all of California is $458 billion, three times the size of the plan in 2020.

The insurance industry is currently pessimistic about this wildfire. On one hand, many people doubt whether FAIR can cover the losses of policyholders. If it runs out of funds, many residents may face bankruptcy. On the other hand, this will also deter more private insurance companies, making it even more difficult for many areas in Southern California to restore normal insurance orders.

This is also the most severe wildfire in California since the 2018 fires. More seriously, the continuous outbreak of severe wildfires has triggered a collective withdrawal from the insurance industry.

Climate experts further point out that California's weather has been unpredictable in recent years, fluctuating between drought and heavy rainfall. This week's wildfires are due to the drought conditions in the coastal areas and strong offshore storms. Under the influence of various factors, the losses from this wildfire in California are bound to be significant.