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LOS ANGELES — Despite reassurances from state officials, homeowners in fire-ravaged Southern California might have plenty to worry about when it comes to their home insurance.

With damage estimates climbing daily, reaching more than $1 billion Wednesday, homeowners fear that insurance companies will raise rates or even cancel policies in the wake of the fires.

State officials and consumer advocates say that's not likely, but the scope of the fires and past tussles with insurers make many Californians skeptical.

Officials say they'll be able to rein in rates, pointing out that insurance in California is highly regulated, and authorities aren't likely to approve any increases in premiums, especially after pushing companies to reduce premiums this year.

Also, California remains the nation's largest market for homeowner insurance, which is a profitable line of business despite the risks.

That didn't stop Allstate Corp., the nation's second-largest property-casualty insurer, from announcing earlier this year that it would no longer underwrite new California homeowner policies, citing risks from wildfires and earthquakes. The company is also seeking a 12 percent rate hike for its existing customers.

Major insurers are inspecting homes in high-risk areas throughout the West and threatening to cancel coverage if owners don't clear brush or take other precautions.

More than 3,600 homes were destroyed in 2003 when wildfires swept through Southern California, and insured losses surpassed $2 billion, according to the Insurance Information Institute.

So far, about 1,500 homes have been lost across Southern California in this week's fires. The number is expected to rise.

Insurers said they have sufficient reserves to pay claims that will likely surpass $1 billion.

But the likelihood of companies taking a harder look at underwriting and pricing policies increases with the price tag of the fire, said Donald Light, a senior analyst with Boston financial consultant Celent. "The higher the final reckoning, the more likely companies are going to act."

And after the 2005 Gulf Coast hurricanes, a number of companies, including Allstate and State Farm Fire & Casualty Co., raised rates, canceled or limited homeowners' policies.