CHICAGO — Still mopping up the mess from two hurricanes, some residents of the Gulf Coast now face the possibility of losing their homeowners insurance in coverage shifts that could jeopardize the rebuilding of a devastated region.

The chairman of Allstate Corp., the nation's second-largest auto and home insurer, said yesterday that the company plans to reduce coverage in the region, particularly in the coastal areas, because the risk of catastrophic losses is too great. The Northbrook, Ill.-based insurer reported this week a third-quarter loss of $1.55 billion, its largest quarterly loss as a publicly traded company, stemming from hurricane costs of $3.06 billion.

Allstate's pullback marks the beginning of what some say will be a transformation of the Gulf Coast's insurance market — one that could scar consumers and businesses for years to come. Besides fewer insurance companies competing for their business, people will likely face higher annual premiums and stricter building codes that could drive up home prices.

"It's a very serious situation if insurance companies start to drop people," said J. Robert Hunter, insurance director for the Consumer Federation of America and former Texas insurance commissioner. "No one is going to be writing new policies for a while, and you won't get a loan to rebuild if you don't have insurance."

Insurance officials in the affected states were disappointed in Allstate's reaction.

"We usually have an opportunity to discuss issues of this magnitude before they are released," said George Dale, Mississippi's insurance commissioner. "We have not had that discussion with Allstate. I hope this is premature."

Louisiana Insurance Commissioner Robert Wooley said the state has consumer protections in place that prevent insurance companies from dumping policyholders in the aftermath of natural disasters like Hurricane Katrina. Allstate is the second-largest insurer in Louisiana and third-largest in Mississippi.

The largest insurer in those areas is State Farm Insurance Cos. It has not announced any retreat from the region, and said yesterday it would not comment on its plans.

Nevertheless, Wooley was not surprised by Allstate's announcement. It's pretty typical for insurers to scale back coverage after a catastrophe like Katrina, which is expected to cost insurers more than $34 billion, making it the costliest natural disaster in U.S. history.

The situation reminds many of the aftermath of Hurricane Andrew, which until Katrina was the costliest hurricane in history. When it pounded south Florida in 1992, Andrew threw the state's insurance market into chaos. The $20 billion in insured losses drove 10 insurers into insolvency and the survivors were reluctant to stay.

Allstate, for one, threatened to cancel 300,000 of the 1.1 million homeowner policies it had at the time in Florida. It also requested a rate hike of 40 percent to 65 percent. As more insurers announced cutbacks, the state imposed a moratorium forbidding insurance companies from abandoning policyholders. Florida legislators also established a state-run insurance pool that acts as the insurer of last resort for homeowners. Nearly one million property owners became customers of the pool after Andrew.