Pacific Gas & Electric Co.’s financial woes from the California wildfires, which led to plans for the utility to file for bankruptcy protection, could lead to tighter underwriting for other utilities, experts say.

With an estimated potential of some $30 billion in claims, PG&E will not have remotely enough in coverage to pay its liabilities, experts agree, even though it has catastrophe bond coverage and is a member of industry mutual insurers offering extensive liability limits.

And although energy insurance capacity is abundant, recent renewals have seen some rate increases, according to a broker report.

San Francisco-based PG&E, owner of the biggest U.S. power utility by number of customers, said Monday it is preparing to file for Chapter 11 bankruptcy for all its businesses because of the liabilities it faces from catastrophic wildfires in 2017 and 2018. The utility faces lawsuits from property owners and insurers that allege poor upkeep of its transmission lines caused fires.

PG&E’s coverage includes a $200 million catastrophe bond, according to reports. In addition, the utility is a member of energy industry mutual insurer Associated Electric & Gas Insurance Services Ltd., based in East Rutherford, New Jersey, and Tampa, Florida-based excess insurer Energy Insurance Mutual Ltd., according to the insurers’ most recent reports.

Policyholder lawyer David L. Elkind, senior counsel with Anderson Kill P.C. in Washington, said it is likely PG&E has a first layer of about $35 million from AEGIS, with possibly several hundreds of millions of additional excess coverage provided by others, including EIM.

Spokespeople for the insurers could not be reached for coverage.

PG&E Corp. said it has some $1.4 billion in property and liability insurance for wildfire events for the 2018-19 policy year, in a recent filing with the U.S. Securities and Exchange Commission.

The program comprises $700 million in general liability coverage, subject to a self-insured retention of $10 million per occurrence, and $700 million for property damages only, according to the November quarterly filing.

Artemis.bm, a news service covering the insurance-linked securities market, reported that PG&E’s $200 million catastrophe bond, known as Cal Phoenix Re Ltd. (Series 2018-1), is the first ever to cover wildfire property risks and also covers third-party liability losses.

Whatever its coverage, it would not have enough to cover wildfire-related claims, said Mr. Elkind. “I doubt there’s much of an issue of coverage,” he said. “It’s just a matter of there not being enough money.”

Unlike asbestos liability cases, there will likely be a limited number of occurrences triggering coverage for wildfires, Mr. Elkind said. In asbestos cases, which drove many manufacturing companies into bankruptcy, courts have deemed claims as separate occurrences because there were separate exposures, times and places.

That is not the case with the wildfires, where there was a “finite number of occurrences,” said Mr. Elkind, who said he does not know the amount of PG&E’s per-occurrence coverage.

PG&E’s financial problems could affect other utilities insurance programs, said Avram Ordubegian, a partner with Arent Fox LLP’s bankruptcy and financial restructuring group in Los Angeles.

“I would not be surprised” if insurers look at PG&E’s situation and be concerned other utilities “might have to go through the same process,” either because of climate change or drought, and that it affects their underwriting.

Mr. Ordubegian said once PG&E files in bankruptcy court, the utility will be required to provide a detailed accounting of its assets and liabilities, including its insurance policies.

Speaking on a panel discussing geopolitical risk and the economy at the Joint Industry Forum in New York Thursday, analyst Jay Gelb, managing director, Barclays Group US Inc., said that California wildfire risk is a key risk to address going forward.

“We have a major utility that is essentially teetering on bankruptcy. If what we’re saying is that it’s the utility’s fault, a lot of things need to be addressed beyond insurance.”

Speaking to Business Insurance after the panel discussion, Mr. Gelb added: “What we are seeing is the potential damage arising from the California wildfires was not fully taken into account by insurers.”

“The fire damage potential needs to be taken into account in underwriting standards,” he said.

Capacity for the power generation sector remains abundant with an estimated $4.25 billion of global capacity available, according to a June 2018 report on the power generation market by Marsh LLC.

But the magnitude of claims following the 2017 California wildfire and hurricane season did have an effect on property and liability markets for power generation risks, Marsh said in the report.

As a result, some casualty insurers increased prices for the power generation sector, while others had offered “take it or leave it” numbers or completely exited the market, according to Marsh.

“While the over-supply of capacity has been one of the main reasons for keeping rates relatively stable, those with a wildfire exposure component will now witness a very different environment due to restricted levels of capacity with markets exiting the class or having treaty restrictions that limit capacity,” Marsh said in the report.