Another catastrophe modeling firm has estimated Californiawildfire losses will go well above $1 billion, and the state'slargest home insurer--State Farm--said it has already logged 2,000claims and the number is expected to rise.

Meanwhile, there was divided opinion on the amount of claimslitigation that could result once the flames are extinguished.

The latest modeling firm estimate came from Boston-based AirWorldwide Corp., which said insured losses were likely to exceed$1.5 billion.

There was also an estimate from Impact Forecasting LLC, a unitof Aon Corporation that insured losses would be between $1.2billion and $1.6 billion.

Previously, Risk Management Solutions in Newark, Calif., saidestimated damage could range from $900 million to $1.6 billion.Eqecat in Oakland, Calif., put out an estimate of a $1 billion lossthat it said could go higher.

State Farm said of the claims it has received, nearly 500 of thehomes involved are either completely destroyed or damaged to thepoint they are uninhabitable.

The number of claims should rise, the company said, as claimsadjusters, local claims staff and agents make contact withpolicyholders who have evacuated their homes. At this point, theinsurer said it has "hundreds" of people working on claims and hassent in five teams in mobile catastrophe vehicles.

Losses this year should impact more excess and surplus linesinsurers than was the case in 2003, when California had a recordwildfire season and $1.1 billion in losses, according to a founderof a risk assessment firm.

Dan Munson, vice president of sales and marketing for CDSBusiness Mapping, said he expects this result because after 2003,insurers tightened up their underbrush underwriting guidelines, nolonger taking the agent's word for conditions, while endingexceptions.

Because the standard carriers tightened their underwriting, "theE&S market had to pick up the slack. This is why I think thatthey will see a larger share of the losses. I expect the losses tobe $1 billion to $2 billion, and closer to the high side."

But because Santa Anna winds have flung embers and flames greatdistances, even companies that wouldn't write home coverage withina quarter mile of brush will be impacted, he said.

Mr. Munson took note of the lawsuits that developed in 2003brought by homeowners that did not have adequate insurance torebuild their homes, but said he does not expect a repeat because"most carriers have implemented replacement cost calculators, orimproved the ones they already had, so I think that this won't be abig factor this time."

However, Ray Bourhis, a partner in a San Francisco law firm,said he doubts there will be less litigation, because insurers"write policies that nobody can understand," and in their intensepursuit of profits will make low-ball claims offers.

Among issues likely to emerge, he said, are policies thatunderinsure the value of the home, statute-of-limitation questionswhen suits are eventually filed, and estimates of damage. Mr.Bourhis has established a Web site (www.insuranceconsumers.com)that gives policyholders suggestions on how to deal with insurersand warns them to be wary.

He said insurers frequently provide estimates for replacementcosts that are far too low.

Gene Weisberg, a Marina Del Rey, Calif., attorney who representsinsurers, said by e-mail he believed insurance adequacy should beless of an issue this year.

Insurers and brokers, as well as policyholders, "have learnedfrom past experience regarding the need to insure property tovalue. Estimating programs have improved as well. Because of thefires four years ago, policyholders have increased awareness of theimportance of buying adequate insurance limits, and the need toperiodically review those limits."

According to an estimate from California Insurance CommissionerSteve Poizner, perhaps a quarter of the homes destroyed by fire areunderinsured.

Dennis Jay, director of the Coalition Against Insurance Fraud inWashington, warned against another possible source of legalaction.

"Though most homeowners will make honest and accurate claims,some inevitably will try to make up for lack of proper insurance bytrying to slip padded claims through insurers," he wrote in theorganization's online publication.

This article updated Oct. 29 10:00 a.m.