How will the California wildfires shape the home insurance industry?

The multiple wildfires raging in California are being described by eyewitnesses as "apocalyptic." While the cost in human suffering is immeasurable, it may take weeks or longer for the true economic toll to be realized.

AccuWeather estimated $52 billion to $57 billion in damage as of Wednesday afternoon, but state officials warned that the number is expected to rise as the unprecedented fires put thousands more homes at risk.

The five wildfires tearing through the County of Los Angeles hit many California homeowners who were already struggling to find a company willing to insure their properties. At least 10 major insurers have either left or reduced coverage in California in the past four years. During that time, the number of homeowners signing up for the state's insurer of last resort has doubled, officials said.

In the past two years, insurers including Allstate, American National, The Hartford and State Farm stopped issuing new fire policies for California homeowners. In some instances, residents said, the insurers would not renew existing policies because of the ongoing risk of damage from wildfires.

"The scenes from the area are heartbreaking, and our thoughts are on the individuals and communities impacted, as well as those that remain under threat," State Farm said in a statement to ABC News.?"We want our customers to know that, when it is safe to do so, they can and should file a claim.? Agents can also help and, if needed, give customers more time to pay their premium. Our teams are standing by to assist."

Allstate stopped issuing new homeowner policies in the state in 2022 and said last year that it would reverse its decision if it was allowed to account for the costs of reinsurance when setting rates.

"Right now, we’re focused on helping our customers recover and rebuild their lives. We’re supporting customers who have filed claims and have teams ready to move into California once it’s safe to help on site," Allstate told ABC News Thursday. "We’re here for our customers."

"We’re supporting customers who have filed claims and have teams ready to move into California once it’s safe to help on site," Allstate said Friday. "Additionally, The Allstate Foundation has pledged two contributions totaling $750,000 to the American Red Cross and the Center for Disaster Philanthropy."

The Hartford stopped writing new homeowners policies in the state on Feb. 1, 2024. American National stopped offering policies in the state on Feb. 29, 2024. Those companies did not respond to ABC News' request for comment on the fires or on coverage going forward.

Just days before the first wildfire broke out Tuesday in LA's affluent Pacific Palisades neighborhood, the California Department of Insurance unveiled new regulations that would soon require insurers to increase home coverage in areas prone to wildfires. The policy would not be retroactive and would only apply to new policies going forward.

Part of a home insurance reform package, the regulations will also allow insurers to charge homeowners higher premiums to protect themselves from catastrophic wildfire claims, the documents said. It will be the first time in the state's history that insurers can include the cost of reinsurance in their premiums, though it is a common practice in other states.

Critics of the rule say it could hike insurance premiums by 40% and doesn't require new policies to be written at a fast enough pace.

The new rules are set to take effect at the end of January following a 30-day review period; but for many Californians, that regulation will come too late.

One example is the Levin family.

The fast-moving wildfires threatened Lynn Levin Guzman's childhood home in Eaton, California. The 62-year-old emergency room nurse said, in a post on TikTok, that she snuck back to an evacuation zone to attempt to protect the home by spraying it with water from a hose because her parents' fire insurance was cancelled.

"They're 90 years old. They've lived in this house for 75 years, and they've had the same insurance," Guzman told ABC7 Eyewitness news, "and the insurance people decided to cancel their fire insurance."

"So, thank you California insurance companies for supporting residents who pay taxes and love California," she said.

"And they wonder why people are leaving California," she added.

An apparent lack of viable insurance options has a growing number of California homeowners flocking to the FAIR Plan, the state's insurer of last resort. Meant to be a stopgap rather than a permanent replacement, it does not offer comprehensive policies. According to state officials, the number of policies under the FAIR Plan has more than doubled from 2020 to 2024 to 452,000.

President-elect Donald Trump called out the insurance industry on Truth Social on Wednesday, posting, "The fires in Los Angeles may go down, in dollar amount, as the worst in the History of our Country. In many circles, they're doubting whether insurance companies will even have enough money to pay for this catastrophe."

President Joe Biden also on Wednesday approved a major disaster declaration for California, making federal funds available for those who've lost property. That assistance includes low-cost loans to cover some uninsured property losses, according to the Federal Emergency Management Agency.

The FAIR Plan predicts that it will be able to pay out.

"We are aware of misinformation being posted online regarding the FAIR Plan's ability to pay claims," FAIR Plan spokesperson Hilary McLean said in a statement.

"It is too early to provide loss estimates as claims are just beginning to be submitted and processed," McLean wrote, noting that the plan is prepared for this kind of a disaster and has payment mechanisms, including reinsurance, to cover claims.

State officials say they are considering passing a temporary year-long moratorium on non-renewals in areas recently burned.

Insurance Commissioner Ricardo Lara said in a statement, "Insurance companies are pledging their commitment to California, and we will hold them accountable for the promises they have made."