In 1969, Hurricane Camille came ashore 50 miles east of New Orleans, and in today's dollars would have caused a $9 billion loss, RMS said. The company said a direct hit on New Orleans by a Category 4 or 5 hurricane would have an impact and financial loss that would be far more devastating than Camille.

Both modeling firms said Katrina's impact on Gulf Coast oil platforms and pipelines will be far more severe than Hurricane Ivan last year, which did an estimated $2 billion in damages.

Katrina's first strike last Thursday against the state of Florida will cost insurers anywhere from $600 million to as much as $2 billion in covered losses, according to various estimates.

Katrina initially was a "minimal hurricane" that caused only several hundred million dollars in insured damages, officials at the Insurance Information Institute estimated.

Katrina plowed through Fort Lauderdale in South Florida Thursday night and early Friday with wind gusts reaching 92 mph. At least four people were killed and a family of five was missing as Katrina took her time moving out into the Gulf of Mexico.

Most businesses and government offices in Miami-Dade and Broward counties were closed Friday, and officials said flooding was still the main concern after the storm dropped up to 11.5 inches of rain in some areas.

But Mr. Hartwig said the storm did not cause extensive damage during its first landfall. "It should have a minimal effect because it struck an area whose buildings have been significantly strengthened in the 13 years since Hurricane Andrew hit the same area," he said.

The several hundred million dollars in insured losses estimated to be caused by the storm were expected to be in the form of minor property claims, business interruption claims and comprehensive auto coverage from trees falling on cars, he said.

Katrina will join Hurricane Dennis in late June and Hurricane Ivan last year as the third hurricane to hit the Gulf area within 12 months.

Risk Management Solutions were a little more pessimistic about insured losses from Hurricane Katrina's first landfall, setting their damage estimate at a range of $1- to $2 billion.

The catastrophe modeling firm AIR Worldwide estimated last week that insured losses from the initial landfall of Hurricane Katrina should not exceed $600 million.

With maximum sustained wind speeds of 80 mph at landfall, Hurricane Katrina was a fairly weak Category 1 storm. However, AIR said its estimate is higher than would be expected for a typical weak Category 1 hurricane due to two factors--landfall location and forward speed.

Hurricane Katrina made landfall in the heavily populated area between Hallandale Beach and North Miami Beach. "The high density and value of properties in Miami-Dade County contributes to a higher estimate of insured loss than one would expect for a typical weak Category 1 storm," said Jayanta Guin, AIR's vice president of research and modeling.

Katrina came ashore with a slow forward speed of approximately 6 mph and lost very little strength as it crawled across the Florida peninsula. "Damage does not occur instantaneously, rather it accumulates over time from repeated battering," according to AIR, noting that engineers call this phenomenon "fatigue failure."

"Losses for Katrina would have been lower had the storm moved at a more typical pace," AIR said.

Subjected to extended pounding by hurricane force winds, building components can weaken and fail. "We are not likely to see much structural damage from Katrina's Category 1 winds, but we expect damage to roof shingles, cladding and other non-structural components, such as awnings," said AIR. "Mobile homes can also sustain considerable damage when subjected to Category 1 winds over a long period of time."

High demand for repairs following Florida's 2004 hurricanes drove repair costs up, adding significantly to insurers' losses, AIR noted.

"In an analysis of detailed claims data from the 2004 hurricane season, AIR found that the effect was magnified by the fact that the storms were clustered both in time and location," the firm said. "Some of the damage from 2004 has still not yet been repaired and will impact the ability of contractors to respond to Katrina. In this way the damage from 2004 could lead to some increase in repair costs for Katrina."