The wind-driven wildfires burning out of control in the Los Angeles area couldn't have emerged at a more perilous moment for California's homeowners, as officials try to rehab what they concede is a deepening "insurance crisis."

"We were all thinking 2025 is going to be the year insurers regain their appetite for the market in California, but having this catastrophe hit us right out of the gate is really unfortunate," said Amy Bach, the executive director of United Policyholders, a California-based nonprofit consumer group.

"Up until this latest disaster," she said, "we thought we might be turning a corner."

The state Department of Insurance issued a new regulation last month meant to turn the tide of some of the largest insurance companies' refusal to take on new customers in California or decisions not to renew policies of current ones. Under the rule, insurance companies are permitted to pass on the cost of reinsurance to consumers, although at an amount that can't exceed an industry standard.

Reinsurance is protection that insurance companies acquire to shield themselves from catastrophic claim events.

The Insurance Department said California had been the only state that didn't allow the cost to be passed on.

In return, insurers doing business in the state must again provide coverage in fire-prone areas at a mandated amount. Another rule finalized last month allows insurers to incorporate catastrophe modeling into their rates on the condition that they increase their policy offerings in underserved areas of the state. 

"Californians deserve a reliable insurance market that doesn't retreat from communities most vulnerable to wildfires and climate change," Insurance Commissioner Ricardo Lara said in a previous statement. "This is a historic moment for California."