If insurance payouts for California wildfire damage reach $1.5billion, the ultimate economic benefit to the state's economy"could total $3 billion to $4.5 billion," according to aneconomist.

That analysis came from Robert Hartwig, president of theInsurance Information Institute in New York, who called insurers"economic first responders"

Meanwhile another rating group said that property-casualtyinsurers should be unaffected even if the insured loss from thefires is $1.6 billion. Modeling firms have estimated the loss willrange between $900 million on $1.6 billion.

Mr. Hartwig said that each dollar paid to policyholders willripple through the California economy, having an impact two tothree times as large as the original amount paid for the claim.

In a statement, he explained that such an economic impact willresult because contractors, retailers and others from whom goodsand services are purchased will have incomes rise and will increasetheir spending accordingly.

"The ultimate economic benefit to the California economy couldtotal $3 billion to $4.5 billion if insurance payouts reach $1.5billion," he said.

In his view, "The California economy is about to receive a muchneeded injection of insurer capital that will help revive itsconstruction and homebuilding industries, boost the retail,service, hotel and restaurant sectors, and in turn increase taxrevenues for local, state and federal governments."

He noted that the state "lost nearly 30,000 construction jobs inthe 12-month period ending in September 2007. Overall, the state'sunemployment rate rose from 4.8 percent to 5.6 percent during thattime."

While the wildfires "were undeniably a tragic event, therebuilding, repair and clean-up that follows will at least provideemployment to thousands of Californians for many months to come,"said Mr. Hartwig.

He mentioned that homeowners policies also include a provisionpaying for the additional costs of living away from home if apolicyholder cannot remain there due to damage from a fire, stormor other insured disaster; it covers hotel bills, restaurant billsand other day-to-day expenses incurred while a policyholder's homeis being rebuilt.

I.I.I. said that in California, additional living expensecoverage may also provide reimbursement for those who were forcedto evacuate by civil authorities, but whose homes were not damagedby the fire. It was noted, however, that this coverage will differfrom company to company.

The overwhelming majority of claims are expected to come frompolicyholders who have homeowners, auto and business insurancecoverages. Most analysts are, as of today, estimating insuredlosses from the southern California wildfires at anywhere from $900million to $1.6 billion.

Moody's Investors Service said that it does not expect thatinsured losses from the wildfires will significantly impact p-cinsurers it ratings.

Moody's Senior Analyst Pano Karambelas said in a statement that"the brunt of the losses will be felt by both admitted and excessand surplus lines insurers with significant residential linesmarket share in the affected areas. To a lesser degree, there willalso be claims activity from automobile and business interruptioncoverage due to mandatory evacuations."

He said Moody's p-c ratings will remain stable because personallines carriers are financially well-positioned following two yearsof hard-market property pricing and benign catastrophe experience.In Mr. Karambelas' analysis, he said the severity of the firelosses, while nearing a record, is small compared to exposureinsurers have to moderate and severe hurricanes andearthquakes.

Moody's said for the vast majority of rated issuers, probablemaximum loss exposure from wildfires "is quite manageable and wouldnot be expected to impact more than one quarter's earnings."

The rating firm warned that insurers could face more severeevents in the future if the state's explosive development inaffluent wildland communities continues.

Last week, Fitch Ratings said carriers are well positioned toabsorb California fire losses, since catastrophe claims have beenwell below average this year and Standard & Poor's said it ismaintaining its current stable outlook on the property-casualtyinsurance sector in the face of the wildfires.