Hurricane Dolly crashed into Texas today whacking the coastal resort town of San Padre Island with winds up to 100 mph and inflicting heavy flooding as it moved north.

Catastrophe modeling firms had widely differing figures on possible insured loss that could be involved.

Boston-based AIR Worldwide said it could be anywhere from $300 million to $1.2 billion with an expected (mean) loss of $600 million.

Eqecat, based in Oakland, Calif., in an early preliminary estimate, said insured loss would probably be less than $800 million.

The Category 2 storm on the Saffir-Simpson scale tore roofs and pushed over commercial signs as heavy rain poured down at up to five inches per hour.

Tom Larsen, Eqecat vice president, said his firm did not expect a lot of damage to natural gas well platforms in the Gulf of Mexico near the Texas coast because they were above the level of waves, which approached 40 feet.

Disruptions to energy operations were expected to be minimal, he said. The severe flooding, he added, could mean losses for insurers with commercial line multiperil risks and business interruption policies.

However, Mr. Larsen said, his company lacked data on that coverage in the area and the uncertainty surrounding possible flood damage made losses difficult to predict.

AIR said there was considerable uncertainty in estimates due to Dolly's slow forward motion, its significant precipitation and the uncertainty in its future direction as it tracked inland. The company noted that a 10 mile difference north or south has considerable impact on losses.

AIR estimated insured losses in Mexico as less than a quarter of U.S. insured losses.

Peter Dailey, director of atmospheric science at AIR Worldwide, said by 2 pm EDT Dolly had diminished to a Category 1 hurricane with winds below 95 mph.

Many Texas homes, he said, are likely to suffer damage to roof shingles and wall coverings, and "there may also be damage to unprotected windows from the wind-borne debris."

Mr. Dailey said "the dominant construction type of insured properties in Mexico is confined masonry, which should fare reasonably well."

AIR noted information from the U.S. Interior Department's Minerals Management Service that oil and gas producers in the Gulf of Mexico yesterday had shut down about 5 percent of production.

The firm said Dolly's track is well south of the heaviest concentrations of offshore assets and no lasting shutdowns are expected. "Physical damage to platforms and rigs is likely to be quite limited, with any insured losses dominated by business interruption," said Mr. Dailey.

As the hurricane arrived, Robert Hartwig, an economist and president of the Insurance Information Institute, issued a statement noting that "Texas is among the riskiest places in the United States for insurers to operate."

According to I.I.I. figures, the top five private home insurers in Texas and their respective market shares are State Farm, 29.6 percent; Allstate, 14.9 percent; Zurich, 13.1 percent; USAA, 7.7 percent; and Travelers, 5.5 percent.

The top five commercial insurers and their market shares according to I.I.I. are Zurich, 14.8 percent; Travelers, 9 percent; Hartford Fire & Casualty, 8.4 percent; ACE Ltd., 6 percent; and Nationwide, 5.7 percent.

Mr. Hartwig noted that Texas and Louisiana were the two states affected in September 2007 when Hurricane Humberto became the only major windstorm to make landfall in the United States last year.

No hurricanes struck the United States in 2006. Prior to that, the last windstorm to hit the U.S. coastline was Hurricane Wilma, which swept through Florida in October 2005.

Many coastal homeowners in southwest Texas have windstorm and hail coverage through the Texas Windstorm Insurance Association (TWIA), which sells policies to those residing in parts of Harris County and 14 other Texas counties along the Gulf Coast.

According to I.I.I. data, private insurers in the voluntary market have windstorm and hail deductibles that range from 0.5 percent to 25 percent and from $100 to $5,000. Some insurers require a minimum deductible, typically 2-to-5 percent.

This article updated 7 p.m.

Special Reports /

Dolly Damage By One Estimate Could Exceed $1 Billion

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