The Los Angeles wildfires have spread across tens of thousands of acres of land, burning everything in their path. Homes have been destroyed and lives upended as families begin the process of rebuilding — not only their homes, but their lives.

While a story like this draws the entire nation’s attention, an added dimension is the fact that many properties that have been destroyed are homes to the wealthy and the well-known, as well as some historical landmarks. For the latter, the costs are immeasurable.

For many, insurance will provide the necessary resources to help with certain financial costs. Yet insurance will likely only cover the hard assets that are destroyed, not the memories nor the keepsakes, that no amount of money could ever replace or restore.

The cost to the insurance companies will be easily measured in the tens of billions of dollars. Yet insurance companies are not charitable organizations, giving away money.

By design, insurance is pooled risk. By selling insurance policies across a wide swath of diverse events, the premiums collected (what people pay to be insured) are used to cover damages for covered events. This means that for large insurers that cover events across the country, premiums collected to cover damages from........

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