Santa Barbara residents who are thinking insurance money will flow in easily to rebuild homes burned in the Jesusita Fire may have to think again.

Many of the 78 destroyed houses sat in high-risk areas where it’s tough to get robust policies, and a sagging economy means insurers and their backers will get aggressive in trying to limit payouts, insurance experts say.

Though the financial woes at insurance giants such as AIG happened in a parts of the companies walled off from homeowner policies, the big carriers are still hurting, said Dave Bender, an insurance policy enforcement attorney with Anderson Kill Wood & Bender in Ventura. Homeowners who suffered losses should be ready to get tough with their carriers, Bender said.

“It would not surprise me if we see some litigation arising out of this,” Bender said “You’ve got carriers who are going to be tough on claims, and you’ve got some sizeable losses because of the high value of homes in the Santa Barbara area.”

Further complicating matters, many of the homes damaged or destroyed in the Santa Barbara foothills sit in high-fire risk areas where insurers are reluctant to tread. And if private insurers do go there, the coverage may not be as robust as in areas farther from explosive chaparral.

“The smarter underwriters know that even if brush is cleared a long way away, you get burning embers that go a mile or more,” said Randy Kinsling, a managing member in TWIW Insurance’s Ventura office. “When you get a hot enough fire, those things are like rockets. It has always been and will always be difficult to get underwriters interested in writing policies for Santa Barbara County.”

When no insurer will take on a home, the last option is the California Fair Plan, a limited policy made available in by legislation in the late 1960s and supplied by a consortium of private insurers. The Santa Barbara foothills are eligible for the coverage.

Mike Harris, a spokesman for the California Fair Plan, didn’t have an exact figure of how many homes in the Santa Barbara area are insured with the group. But he said the Fair Plan has received 46 claims related to the Jesusita Fire as of May 12, eight of which were total losses. The damage to California Fair Plan clients stands at about $15 million, but that figure could change as adjusters survey scenes.

The Fair Plan tops out at significantly less than the several million dollars that some of the homes in the Jesusita Fire’s path fetch. It also has limits on extra money for rebuilding.

“We only write up to a maximum of $1.5 million for structures or contents at any one location,” Harris said. “We know that’s just the guest house or the dog house up in Santa Barbara.”

But the good news is that more private insurers seem to be going into high-risk areas than in the past, said Sam Sorich, president of the Sacramento-based Association of California Insurance Companies, whose members write about 40 percent of policies in the state. Sorich said the Fair Plan’s market share has declined in recent years.

“There’s been a willingness of companies to compete for business to write more premiums, which is a healthy development,” Sorich said. “Even in the aftermath of some of the recent wildfires, companies have not been fearful of taking on risk.”

Premiums in Santa Barbara could rise, Sorich said. All insurance rate increases need approval from state regulators, but insurers have to take in account the losses they’ve seen in a given area.

One catastrophe usually doesn’t push up rates, Sorich explained, because insurers are required to take into account a longer time frame to “smooth out” loss trends after a big event. But the back-to-back disasters of the Jesusita Fire and November’s Tea Fire, where more than 200 homes burned, could move the needle.

“It will go into the calculations, no doubt about that,” Sorich said. “If you have a couple of events, the loss trend that’s used to predict future losses becomes more pronounced. Companies have an obligation to make sure the rates they’re charging will cover future losses, and the best science available is the actuarial calculations looking at past losses.”

Nearly all insurance is reinsured at some point. Bender, the insurance policy enforcement attorney, said many of the big losses in Jesusita Fire will probably be shifted to those reinsurers, who in turn will get tough on paying out – another possible source of upward pressure on rates.

“That’s not something that’s going to be felt by the homeowners who lost homes, but it’s something that in the long run may be felt by consumers,” Bender said. “The reinsurance market is as hard as the primary insurance market is right now when it comes to fulfilling claims.”

In addition to homeowners who lost property, many businesses suffered a loss of sales because of the Jesusita Fire and the evacuation warnings and orders that came with it.

Some of them may have insurance policies for business disruptions because of disaster, but it might be hard to get a payout, Bender said. Some policies require property damage to trigger any claim fulfillment.

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