By Joe Brock and Chad Terhune

ALTADENA, California (Reuters) - As Los Angeles construction worker Ivan De La Torre surveyed a landscape of smoking wreckage in fire-ravaged Altadena, a question nagged at him: how would insurance companies cover the cost of rebuilding an entire neighborhood?

As hundreds of Los Angeles residents return to find homes reduced to ashes due to a devastating wave of wildfires, many are fearful that their insurance policies may not cover the rebuild cost and that future premiums will be astronomical.

"My concern is that the insurance companies won't be able to handle all the claims and file for bankruptcy and that's that. It's scary," said De La Torre, 32, whose uncle and sister both lost their houses in a fire that consumed half of Altadena, a suburb north of Los Angeles of some 40,000 people.

Leo Frank III, a 66-year-old actor who lost his family home in Altadena, said he fears insurers could drag their feet on paying claims and fail to cover the full cost of reconstruction.

"We will rebuild. No one is taking our house," said Frank, as he hunted for a shower seat for his 96-year-old mother in a parking lot full of donated supplies in Pasadena.

"But it will be a mess."

Frank said he knows some neighbors who lost their homeowners coverage prior to the fires as insurers retreated from parched regions in California increasingly prone to wildfires.

"We were lucky we still had a policy," he said.

The wildfires, among the worst natural disasters ever to hit California, have killed at least 11 people and destroyed or badly damaged more than 10,000 structures.

Reuters contacted nine of the top home insurance companies in California for comment.

State Farm, Nationwide, Allstate, Mercury, Liberty Mutual and Farmers responded with statements saying they were working with policyholders to help them make claims, without addressing specific concerns about residents not receiving sufficient payouts or rising future premiums.

Following the fires this week, California Insurance Commissioner Ricardo Lara invoked moratorium powers to suspend all policy non-renewals and cancellations from insurance companies for one year.

Lara said in a statement on Friday that next week he will host free insurance workshops in Santa Monica and Pasadena, suburbs close to the two biggest fires.

U.S. insurance stocks slid on Friday as analysts estimated the insurance costs from the wildfire could top $20 billion. Private forecaster AccuWeather estimated the damage and economic loss from the fires at $135 billion to $150 billion, portending soaring homeowners' insurance costs.

STATE INSURANCE

Though Altadena has never experienced fire devastation on this scale in the past, the suburb does sit at the base of the San Gabriel Mountains, which are prone to wildfires. This has made getting fire insurance more difficult.

Many residents in Altadena, a racially and economically diverse suburb, are covered by the California FAIR Plan, an insurance program backed by the state of California that is used by property owners who cannot find private market coverage.

FAIR Plan did not respond to a request for comment.

As private insurers have rejected or dropped homeowners in fire-prone areas of California, residents have increasingly switched to FAIR Plan, data shows.

As of the end of September last year, 958 homes in Altadena were covered by the scheme, up 28% from a year earlier, according to data from the insurer.

In Pacific Palisades, a wealthy suburb west of downtown Los Angeles ravaged by wildfires this week, the rise in the use of the FAIR plan has been more stark. There are 1,430 homes covered under the scheme, up 85% from a year earlier and quadruple the number in 2020, the insurer's data showed.

Gabby Reyes, whose home in Altadena was destroyed in a fire on Wednesday morning, said FAIR Plan staff had been helpful but she was concerned that her policy would not be enough to cover rebuilding the home she shares with her mother and daughter, given the fire has only left behind the foundations.

"They have been talking to us, and they've been really good," Reyes told Reuters, adding that property speculators had cold-called her to ask if they could buy her land.

"You can't call people like that when they're devastated."

(Reporting by Joe Brock and Chad Terhune; Additional reporting by Jonathan Allen; Editing by Mary Milliken and Sandra Maler)