U.S. insurers could pay $600 million in claims to victims of Hurricane Lili, the first hurricane to strike the U.S. mainland since 1999, according to a preliminary estimate by the Insurance Information Institute in New York.

The preliminary estimate is based on the Institute's survey of insurers, as well as an average of initial estimates prepared by Boston-based AIR Worldwide. AIR, a wholly-owned subsidiary of the Jersey City-based Insurance Services Office, Inc., uses a computer-modeling program to estimate insured losses from catastrophes.

The Institute pointed out that Hurricane Isidore, which made landfall in Louisiana as a tropical storm on Sept. 26, caused an estimated $100 million in insured losses.

"I'm feeling a lot better today than I expected to be on Wednesday," said Robert Wooley, acting commissioner of insurance for the Louisiana Department of Insurance. "We thought we were going to have a catastrophe."

Lili, which was a Category 4 hurricane, with sustained winds of 140 miles-per-hour, dropped to a Category 2 storm, with sustained winds of 100 mph, by the time it hit the state on Wednesday.

"We're just thankful it wasn't a [Category] four," Mr. Wooley said, noting only four reported injuries, all of which took place after the storm hit. The injuries were to three electrical workers and a sheriff's deputy that occurred in the course of their emergency work.

New Orleans, which experienced flooding from Isidore, saw those areas flooded once again, but should not have suffered any more damage with Lili, he added.

The Institute noted that the majority of losses from Hurricane Lili are expected to affect Louisiana communities in Lafayette, New Iberia, Abbeville and parts of Alexandria. In addition, Arkansas, Mississippi, Tennessee and parts of Texas were affected.

A visual assessment by insurance companies found much of the damage to personal property was to roofs and automobiles. Approximately half the insured losses were to commercial properties, including hotels, oil refineries, farms, and retail stores, the Institute reported.

Paul Hulsebusch, vice president of special operations for GAB Robins, a third-party administrator headquartered in Parsippany, N.J., who was dispatched to the scene, said they have not seen a significant number of claims, and that most of them have been from wind damage. He said reporting is slow, but most of the storm appears to have been through less-populated regions. East of Baton Rouge, there have been no significant claims, he said.

Standard business- and homeowners policies will cover wind damage from Hurricane Lili. However, such policies do not cover damage from flooding, which is covered under policies written by the National Flood Insurance Program, the Institute noted.

Although the insured losses from Hurricane Lili are modest relative to recent natural disasters--Tropical Storm Allison caused $2.5 billion in insured losses last year, for example--"the costs from this storm further adds to the overall toll of losses from catastrophes on the property-casualty industry," the Institute said.

In 2001, insured losses from natural disasters totaled $7.5 billion. So far in 2002, disaster losses total nearly $4 billion, the Institute noted.

Official insurance industry property loss estimates from Hurricane Lili will be available from ISO in the weeks to come.