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NEW YORK (CNN/Money) -
Homeowners and car owners across the U.S. may see a spike in their insurance premiums following Hurricane Katrina, according to a report in the Wall Street Journal.
Current estimates from risk modeling agencies pin insurable losses from the hurricane at $14 billion to $35 billion -- making it the costliest storm on record to hit the U.S. If history is any indicator, insurance premiums should climb, with increases in states beyond just the affected region.
After Hurricane Andrew in 1992, homeowners policies became increasingly costly and insurers also began to offer less-generous policy provisions and higher deductibles in the state of Florida.
Insurers, however, are in a better position today than they were in the wake of Hurricane Andrew. With $400 billion in capital, insurers are well positioned to handle claims.
Allstate (Research) Chairman and Chief Executive Edward Liddy told the Journal that risks were "underestimated" in areas like New Orleans, which will make the cost of insurance go higher in the region.
But consumer groups and regulators are likely to fight any nationwide rate increases and even rate increase in those areas devastated by the storms, saying that the industry managed to be profitable despite last year's barrage of hurricanes and falling homeowners rates in areas outside of Florida.
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How will Katrina transform the insurance industry? Click here.
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