It's official.

Hurricane Katrina is the costliest natural disaster ever.

The massive storm is expected to cost personal and commercial property/casualty insurers at least $34.4 billion in insured property losses.

Luckily -- for the industry and the insured who won't have to worry about getting claims paid -- insurers were enjoying a 29.1 percent increase in net income in the first half of 2005, well before hurricanes slammed into the Gulf Coast, damaging, destroying or leaving inaccessible some 851,000 housing units.

In the first public estimate of hurricane-related costs, Jersey City, N.J. based risk wrangler ISO Properties Inc. said Oct. 4 Katrina's costs will easily surpass the previous record $20.8 billion catastrophe costs wreaked by Hurricane Andrew in 1992.

After making landfall in the U.S., first at the Florida peninsula on Aug. 25, and again, four days later, dead center along the Gulf Coast, Katrina caused widespread damage to homes and businesses in six states: Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia. Greater New Orleans was hit hardest after levee's gave way pouring flood waters into the city built largely below sea level.

Both commercial and residential policyholders in the affected states are expected to file more than 1.6 million claims for property damage including structures (homes and businesses), automobiles, boats and yachts, ISO reported.

Here's a state-by-state rundown of insured losses.

The American Red Cross has estimated more than 350,000 homes were destroyed by Hurricanes Katrina and Rita, while an additional 146,000 sustained major damage. Katrina alone is responsible for the more than 850,000 Gulf Coast region housing units either destroyed, damaged, or left inaccessible or uninhabitable. Since Hurricane Katrina made landfall, the Red Cross has provided hurricane survivors with more than 3.2 million overnight stays.

The nearly one million housing units affected by the two hurricanes is equal to nearly 20 percent of nation's annual home construction, pegged at about 2 million units a year, according to National Association of Home Builders.

ISO's $34.4 billion insured property loss estimate represents an industry wide anticipated insured loss from insurance payments for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses.

The estimate does not include losses to utilities, agriculture, aircraft, ocean marine (including oil drilling platforms) and property insured under the federal flood insurance program.

A day after the estimate, ISO and the Property Casualty Insurers Association of America also reported the property/casualty insurance industry netting a record $30.9 billion after-taxes net income in the first half of 2005 a 29.1 percent increase from the same period last year.

The increase was the industry's best six month period since ISO started keeping tabs quarterly in 1986.

The industry also enjoyed a record net worth gain of 4.7 percent to $412.5 billion by June, up from $393.8 billion by the end of 2004.

"The industry's strong performance in first-half 2005 could not have come at a better time for insurers now facing billions and billions of dollars in insured losses from Hurricanes Katrina and Rita," ISO reported.

Published: October 7, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.