You can't even make the "there have always been [fill in disaster]" argument you get with hurricanes, tornadoes, earthquakes & floods.  9 or the 10 largest firestorms in SoCal history have all occured in the last decade.  It's worse, happening more often and getting worser.

Far as insurance goes, it's the same problem you have with dental insurance and why it doesn't work.  Nearly everyone gets tooth decay and needs dental work regularly, so you can't spread out the risk over a population.  Today, if you live in LA fora decade, it's almost certain a firestorm will hit your neighborhood at some point.  Most mortgages are 30 years, so chances are the house burns before it's even paid off.  Your premium has to be close to the cost of the mortgage itself.

There are only 2 ways to live there now, which is either you are rich enough to be able to afford rebuilding yourself, or use the old Japanese solution which was to build cheap structures out f paper and wood that could burn and be rebuilt in a matter of days.  Of course, modern building codes don't allow for that.

Given how widespread the devastation is, it's hard to imagine how they are going to rebuild n any reasonable timeframe.  There aren't enough contractors and construction workers to build that many houses all at the same time, even if they try importing them in from all over the country.  Particularly not fancy individual mansions that are custom architectural plans.  Maybe if they do modular construction and factory built housing, but what celebrity would want one of those?

Hollywood was already having trouble keeping production in that neighborhood due to the tax structure and cost of living for the support personnel.  This may very well be the end of Hollywood as the global movie capitol of the world.  Which would also mean an enormous hit to CA tax revenue since it's a major industry there.

The effects of this conflagration are going to be felt for a long time.  I don't think they'll ever recover.  LA is going to be like Detroit after the auto industry left.

RE