California Insurance Commissioner Ricardo Lara announced the enforcement of regulations aimed at expanding insurance coverage in areas prone to wildfires. the countrywhere insurance companies have fled and homeowners have struggled to find coverage in recent years.

The head of the California Department of Insurance (DOI) said on Friday that the state will allow insurance companies to use catastrophe models to determine rate increases in hopes of stabilizing the market. Instead, insurers will be required to increase comprehensive coverage in fire-prone areas to at least 85% of their market share.

Senator Ricardo Lara joined a group of unions who gathered together for a rally in Wilmington Oct. 3. 2018. Lara is now the commissioner of the state Department of Insurance and has proposed reforms to address California's insurance crisis. (Brittany Murray/Digital First Media/Long Beach Press-Telegram via Getty Images / Getty Images)

"Giving people more options to protect themselves is how we solve California's insurance crisis," Lara said in a statement. "For the first time in history we need insurance company to grow where people need help the most."

The DOI said that for 30 years before the rule change, states required insurers to use historic wildfire losses to determine a catastrophe factor for rates, which resulted in higher premiums following a disaster.

HOME INSURANCE OPTIONS ARE SHINKING AMONG NATURAL DISASTER STATES

With the use of catastrophe models, which predict future losses, insurers will be able to consider climate change risk and also take into account fire risk reduction measures.

A firefighter carries a chainsaw as the Windy Fire burns in the Sequoia National Forest near Johnsondale, Calif., Sept. 22. 2021. (Getty Images/Getty Images)

The goal is to attract insurers to these high-risk areas and provide more market options than California's bare-bones FAIR Plan, which many homeowners and businesses leave as a last resort if there are no other options.

HOME INSURANCE RATES HAVE INCREASED NEARLY 40% SINCE 2019 – BUT THE FASTEST RISE IN THE STATE

Regulators hope the ability to raise rates more quickly will spark a return of insurers that have left the state. Under previous California rules, insurance companies could take years to receive approval to increase premiums.

Downed power lines and burning remains of homes and vehicles remain after the Glass Fire tore through Napa Valley, California, Sept. 28. 2020. (Samuel Corum/AFP via Getty Images/Getty Images)

Several insurance companies have stopped selling new home insurance policies in California in recent years due to wildfires and the higher cost of doing business in the state. Now, of the top 12 insurance companies in California, only five are still writing new policies.

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After State farmCalifornia's largest insurance company, announced earlier this year that it would cut 72,000 home and apartment policies in California because of inflation, regulatory costs and increased risk from catastrophes, Lara called the situation "a real crisis."

Sunny Tsai of FOX Business contributed to this report.