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Katrina's costs projected at about US$34.4bn

Sal Impastato, owner of the Napleon House Bar & Cafe, prepares to clean a bust of Napoleon as he gets ready to re-open the famous New Orleans locale for the first time since Hurricane Katrina hit, on Tuesday, in New Orleans. He hoped to open the bar within a few days. PHOTO: AP

Hurricane Katrina is likely to result in at least US$34.4 billion in personal and commercial property loss claims, according to the first publicly released survey of the nation's insurers.

ISO's Property Claim Services Unit said Tuesday that the preliminary estimate of damages to homes and businesses in six states would make Katrina the most costly US natural disaster ever, surpassing the inflation-adjusted US$20.8 billion in losses from Hurricane Andrew in 1992.

Several risk assessment companies earlier released projections of insured losses from Katrina, with totals ranging from US$14 billion to US$60 billion.

The ISO's tally includes anticipated insurance industry losses for personal and commercial property, including boats and vehicles, business interruption coverage and additional living expenses. Reported damaged to insured onshore oil facilities is included, ISO officials said.

The estimates exclude losses to utilities, agriculture, aircraft, offshore drilling platforms and property insured under the federal flood insurance program.

Also Tuesday, the Securities and Exchange Commission said it was easing rules for insurance companies to raise capital, responding to concern that the billions of dollars of losses from Katrina and Hurricane Rita could make it harder for the insurers to pay victims' claims.

ISO, an insurance risk and data firm based in Jersey City, New Jersey, said that policyholders in the six affected states -- Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia -- were expected to file more than 1.6 million claims for damage to personal and commercial property, automobiles, and boats and yachts.

"The personal property loss claims include nearly 75,000 boats and yachts in the affected states, with an estimated insured value of slightly under US$2 billion," the ISO report said.

The report said that Louisiana, the state hardest hit when Katrina made landfall on Aug. 29, was expected to produce 900,000 claims for some US$22.6 billion in losses.

It gave these estimates for the neighboring states: Mississippi, 490,000 claims for US$9.8 billion; Alabama, 123,000 claims for US$1.3 billion; Florida, 110,000 claims for US$468 million; Tennessee, 8,400 claims for US$46.1 million; and Georgia, 3,300 claims for US$22.2 million.

The report said that insurers were still assessing losses, noting that access to some badly damaged areas in Louisiana was complicated by flooding. It also said tracking down property owners who evacuated was proving difficult.

ISO said it "will resurvey insurers in 60 days as more claims are filed and existing claims are closed" to update its findings.
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