Hurricane loss 'less than feared'

The daily commute has become a bit more tricky

Hurricane Frances is likely to cost insurers less than first feared.

Insurance firms probably will have to pay $3-6bn (£1.7-3.4bn), said Risk Management Solutions - down from initial estimates of as much as $10bn.

After hitting the Florida coast and battering the "Sunshine State", the storm lost some of its power and has now been reclassed as a tropical storm.

The more powerful Hurricane Charley, which arrived three weeks earlier, is thought to have done more damage.

"We're breathing a sigh of relief," said Loretta Worters, a spokeswoman for the Insurance Information Institute.

"This was not the 'storm of the century' everybody seemed to claim it would be."

Insurers' losses will be limited because much of the damage has been caused by flooding, compensation for which is covered by government funding.

Moved out

Even so, Frances - which hit over a three-day national holiday weekend - has killed at least four people and nearly three million people have left their homes because of the hurricane.

About 5.8 million people are without electricity because of damage to power lines, Florida state officials said.

There are concerns that the storm, currently swirling over the Gulf of Mexico, may return.

Before the storm hit the US, about 2.8 million people had been moved to safety inland, while 70,000 residents and tourists took refuge in shelters.

Some areas in Frances' path have yet to recover from Hurricane Charley, which caused more than $7bn in insured losses after coming ashore on Florida's south-west coast.

The worst such natural disaster in the region, Hurricane Andrew, caused damage estimated at $20bn when it struck in 1992, contributing to devastating losses on the Lloyd's of London insurance market.

But analysts say insurers have since limited their exposure to hurricane damage, with the Florida government taking on a bigger role in disaster insurance.