The wildfires that destroyed homes in multiple sections of the Los Angeles area will test California’s efforts to stabilize the state’s insurance marketplace after many insurers stopped issuing residential policies due to the high fire risk.

It’s too soon to know the financial cost of the wildfires burning around Los Angeles. But the toll on California’s troubled insurance market could be enormous.

California's historic wildfires come nearly a year after an insurance company canceled thousands of homeowners policies. The insurance agency justified the move as an attempt to avoid financial failure as California sees more wildfires.