The FAIR Plan’s potential exposure is over $4 billion for the Pacific Palisades Fire and more than $775 million for the Eaton Fire, according to an update provided to BestWire. The FAIR Plan insures about 22% of the structures affected by the Pacific Palisades Fire and 12% of those impacted by the Eaton Fire, based on the Cal Fire incident maps.

An insurance pool created by officials in California to help residents in wildfire-prone areas could frustrate victims of the L.A. wildfire.

California legislators are pursuing greater oversight of the California FAIR Plan Association, the state’s insurer of last resort for property coverage, as the threat of wildfires continues to grow, AM Best reported.

Experts have predicted that the fires blazing through several parts of Los Angeles County could easily become the most costly wildfire event in the U.S. One insurer alone faces potential losses of up to $24 billion: the California FAIR Plan.

A recent rule change could cause a spike in insurance premium for homeowners across California, as the costs of the Los Angeles area wildfires are passed onto them in a way that was not allowed in the past.

"The FAIR Plan, a not-for-profit catastrophe insurer, has the payment mechanisms in place to ensure all covered claims will be paid."

California's Fair Plan, the state's insurer of last resort, may be unable to pay billions in claims arising from the Los Angeles fires and may require a bailout that could ultimately be paid by homeowners statewide.