Mr. Guin said, "By providing our clients with a detailed analysis of the total water damage, each company can estimate the losses to its portfolio by applying its own assumptions about the likely payout."

The total loss estimate is:

o New Orleans–$22.6 billion

o Louisiana Storm Surge–$16.2 billion

o Mississippi Storm Surge–$4.4 billion

o Alabama Storm Surge–$793 million

o Florida Storm Surge–$32 million

Michael Gannnon, a spokesman for AIR, said the Boston-based company is sticking to its original insured loss estimate range of $17-to-$25 billion for property wind losses, auto and commercial flood losses.

AIR's report, suggested Donald Light, an analyst for Celent, a research and consulting firm, points to growing evidence that the industry's Katrina losses will end up on the high side of the loss estimates at $60 billion.

Should several suits in Mississippi that seek to force the carriers to pay homeowners claims for flood insurance, which are traditionally excluded, be successful, it could result in an additional $10-to-$15 billion on top of the current loss estimate, he said.

"I would not want to predict how the courts will act in that area," he said, noting the state legal system will be faced with an argument that public policy requires the invalidation of insurance contracts.

He went on to suggest that some insurers might decide it is better to reach settlements than to "throw the dice in court."

"I hope the industry can be fair and a little generous [to policyholders] without endangering their solvency," said Mr. Light, "but this will play out over a period of time."

Closer to the action, Franklin S. Horowitz, chief executive officer of Claims International, which handles claims on behalf of policyholders for large commercial clients, said the insurers are working with policyholders and are striving "to be cooperative."

Mr. Horowitz and his team, who have been working 15-hour days non-stop since Katrina hit in Louisiana, Mississippi and Alabama, said the major debate is along the lines of concurrent causation and how the individual states deal with the issue.

While there are many legal questions, he said as an adjuster it is really "not that difficult to find a solution if you are trying to do the right thing for the policyholder. You can find a way to minimize what those [policy] gaps are.

"[Insurers] are looking for solutions more than they are looking for problems," he added.