Only if they didn't buy quality homeowners insurance.
Quality homeowners insurance solves some problems—but not all.
One major issue (particularly in Pacific Palisades) is that the community infrastructure has been destroyed which lowers the value of all land in that community—at least for some period of time (definitely measured in years, not months).
Do you really want to rebuilt your fully insured home surrounded by piles of rubble on all sides?
What a mess.