Deadly wildfires in the Los Angeles area have sent tens of thousands scrambling for safety and decimated neighborhoods. Wildfire smoke has spread miles from the major blazes as fire crews and the National Guard work to control them.

Wednesday's firestorm in a wealthy area of Los Angeles could be the final straw that breaks California's insurance market. The state's insurance market has been teetering on the edge of insolvency for years thanks to catastrophic wildfires that have driven many insurers to stop writing new policies and drop existing ones.

The California wildfires could drive up premiums and prompt a new wave of private insurers dropping policies or declining to write new ones.