NEW YORK (CNN/Money) - For all the optimists hoping insurers won't be raising rates too much, Hurricane Wilma should finally put those hopes to rest.

Mother Nature's latest blast is expected to cost the insurance industry as much as $10 billion, according to estimates by risk modeling firm Risk Management Solutions, making it the third costliest storm on record behind hurricanes Katrina and Andrew.

And with meteorologists predicting that this season is just the beginning of a long multi-decade cycle of severe weather, industry experts say it's only a matter of time before insurers try to pass the cost of higher claims along to consumers.

"With Hurricane Wilma, I've estimated that so far this year, the industry has suffered $55.7 billion in insured catastrophe losses," said Robert Hartwig, chief economist at the Insurance Information Institute, an industry group. "Rates, however, have been woefully inadequate and now they have to play catch-up."

Just how high could rates go? Consider it a supply and demand equation. Hartwig speculated that double-digit rate increases are likely as insurers reduce exposure to high-risk markets. With decreasing availability and increasing demand, premiums could skyrocket.

The pullback has already started.

Allstate, the nation's largest publicly traded homeowner and auto insurer, said on its third-quarter earnings conference call last week that it plans to scale back in the Gulf Coast homeowner's market after the devastation of hurricanes Katrina and Rita this summer.

Similarly, Allstate didn't renew coverage for over 90,000 homeowners in hurricane-battered Florida last year and received rate increases across the state to reflect the higher risk of offering insurance.

Michael Paisan, principle at Legg Mason Wood Walker, said rate increases for consumers are inevitable as reinsurance costs for primary insurers spike.

He estimated that reinsurers who insure property-casualty companies could raise rates as much as 25 to 30 percent. With primary insurers poised to pay more, they will likely transfer the extra costs to consumers.

While rate increases are likely to be more significant in the hurricane-prone region, analysts expect rates to climb up and down the eastern seaboard as weather patterns become more severe.

But Paisan was wary of estimating just how much more consumers will have to pay since insurers will need approval from state regulators for any increases.

"Insurance companies will try to apply for higher rates based on the losses from this year and new catastrophe models (for future risk)," he said. "But this is going to become a political issue for regulators" as homeowners struggle to rebuild after the hurricane season, he added.

It's a fine balance between appeasing insurers and making sure consumers have access to affordable insurance, said Walter Bell, commissioner of insurance in the state of Alabama.

"Not that anyone wants to approve high rate increases but it does no one good if an insurer goes insolvent," he said. "It's very important to approve adequate rate increases."

But the definition of "adequate" remains vague and will vary from state to state, he said.

Bell added that regulators are concerned by Allstate's decision to curb its exposure to the Gulf Coast region but hope that other companies will consider Allstate's departure as an opportunity to win business rather than a signal to exit the market themselves.

Dick Luedke, a spokesman for Allstate competitor State Farm, which currently has the largest share of homeowner and auto policies in the region, said State Farm is "interested in writing business that's priced appropriately," adding the company did not pull back after four hurricanes last year or Katrina, which hit the Gulf Coast in late August.

The company did, however, obtain a 5 percent rate increase in Florida and has filed for another 8.6 percent rate hike, which is pending before Florida regulators.

But are rate increases and policy terminations really necessary? Some critics are skeptical.

Bob Hunter, director of insurance at the Consumer Federation of America, said insurance companies should have been better prepared to deal with the string of catastrophic storms, and priced their products accordingly.

In the wake of 1992's Hurricane Andrew, insurers turned to risk modeling firms that estimate the probability of losses from severe hurricane activity. Based on the models, he said companies had already built in the chances for more catastrophic events into their pricing models.

"The cyclical nature of hurricanes has been known for decades," Hunter said. "For them to say that we need to jack up our rates or start canceling people based on these Katrina-esque events doesn't make sense and is totally inappropriate."

He estimated that if insurers truly integrated the chances of big storms into their pricing as dictated by risk modelers, rates should only climb 2 to 5 percent.

But industry observers said models can be flawed.

"Short of a crystal ball, models are just an attempt to mathematically gauge the potential for future losses," said Rey Becker, vice president at the Property Casualty Insurers Association of America, an industry group. "Each company is now going to have to make their own individual assessment when it comes to future rates."

For consumers that could mean some pretty hefty price increases down the road.

------------------------------------------------------------------

What will Wilma mean to insurers? Click here for that story.

How did hurricanes Katrina and Rita impact Allstate? Find out here.