These hillside areas have a lot of trees and brush that can burn in wildfires, especially during a drought. Bel Air had a big fire in (1961) and more recently Malibu in (2007).
Homeowners insurance in Very High Fire Hazard areas is more expensive and harder to get.
The NHD goes on to include additional hazard information like proximity to Commercial or Industrial, airport, mining operation, hazardous waste, Mello Roos Tax, and future tax increases.
It is customary in Los Angeles for the seller to pay for the NHD report. The price of an NHD report is about $150.