Los Angeles has too many fires to put out… literally. Taken by the wind, flames from the Palisades Fire, Eaton Fire, and other infernos have burned over 35K acres. Making matters worse, the region’s dry and windy conditions have allowed the two largest wildfires to grow quickly and remain uncontained. As a result, LA’s fires are shaping up to be one of the most costly natural disasters in American history. And investors are hedging against companies that may be responsible for paying for it.

• On Monday, power utility Edison InternationalEIX
  said it couldn’t rule out its equipment as a cause of LA’s wildfire, although it saw no anomalies before the Eaton Fire.
• In response, the corporation’s bonds plummeted and the stock fell over 11% — extending losses that started last week on murmurs that the power company could be responsible.

Fire, walk with me: Determining the fire’s source could help recover damages — much like when Hawaiian Electric paid $2B to settle claims related to its equipment starting a deadly blaze in Maui. However, even when a cause is discovered, it doesn’t always mean affected parties will fully recover. That responsibility would fall on insurers, who investors are increasingly worried about. Year-to-date, the SPDR S&P Insurance ETFKIE

has fallen 3% as personal-casualty firms prepare for what could be a mountain of claims.