Even as loss modelers rank Hurricane Katrina as the costliest natural disaster in U.S. history and more destructive than the four storms that lashed the Southeast last year combined, exactly how bad losses are may not be known for weeks or longer.

Indeed, loss adjusters-who do not know when they will be able to access many storm-ravaged areas-say they expect that the insurance industry still will be sorting out some Katrina-related losses at this time next year.

"It's going to be a very long, long process" to adjust all of the losses, said Robert O'Brien, a Richmond, Va.-based senior vp with Marsh Inc. who coordinates the brokerage's catastrophe response practice.

Days after the category 4 storm slammed into communities from Louisiana to Alabama on Aug. 29, roadblocks prevented many adjusters and property owners from making preliminary damage assessments.

In New Orleans, authorities mounted a wide-scale evacuation operation after two breached levees allowed additional floodwaters to course through the city a day after Katrina had swept through. In some areas of the city, bull sharks, snakes and rats were spotted in the floodwaters, along with the bodies of flood victims. Approximately 80% of the below-sea-level city was under water last week, and the city's mayor estimated that at least hundreds and more likely thousands of residents died in the flooding.

The U.S. Army Corp of Engineers estimated that pumping the city dry would take at least a month after the compromised levees are plugged.

Other areas of the city plunged into lawlessness, with looters and armed gangs roaming the streets.

In Biloxi, Miss., flooding, washed-out bridges and buckled roads prevented adjusters from entering much of the area, where the gaming industry had sprouted in recent years. Katrina submerged or swept away many of the city's offshore casinos, including one tossed onto a nearby hotel.

Complicating the situation for adjusters and property owners is the loss of cell phone as well as landline phone service in the afflicted areas.

Some property owners have been able to make sketchy loss assessments based on news coverage and aerial observations, but they did not expect to have solid loss estimates for perhaps weeks.

Katrina made initial landfall near Hallendale, Fla., as a category 1 hurricane on Aug. 25. Before crossing the state and moving into the Gulf of Mexico, the hurricane caused between $600 million and $2 billion of insured losses, according to catastrophe modelers.

In the Gulf, the hurricane picked up strength. It hit southeastern Louisiana on Aug. 29 as a category 4 storm, with maximum sustained winds of about 145 m.p.h. Katrina's eye passed east of New Orleans before tearing through the Mississippi Gulf Coast and heading northeast.

Catastrophe modeling firms estimate that Katrina caused a total of between $15 billion and $35 billion of insured property damage.

By comparison, Hurricane Andrew caused an estimated $20.9 billion of inflation-adjusted insured damage in 1992, and the four hurricanes that pummeled Florida last year caused a total of $22.8 billion of insured damage.

Hurricane Dennis, the only other hurricane to make landfall in the U.S. so far in 2005, caused an estimated $920 million of insured property damage, including business interruption losses, in July, according to the Insurance Services Office Inc.'s Property Claim Services unit.

Much of the damage from Katrina is flood-related, so only the commercial risks and homeowners that purchased flood insurance from the National Flood Insurance Program or other sources will be covered.

Marsh's Mr. O'Brien said that a large majority of commercial risks in Katrina's path purchased NFIP coverage as well as excess commercial flood insurance.

Rick Parsons, managing director at Aon Risk Services' Financial and Professional Risk Solutions division in Springfield, Ohio, agreed.

NFIP coverage provides a commercial property up to $500,000 of limits per property, Mr. Parsons said.

Some commercial property policies in the standard market also include flood coverage, the terms of which are negotiated between the buyer and underwriter, he said. "After 9/11, you couldn't get it in package policies; now it's fairly available," he said.

Sometimes, the coverage is available as sublimits, he said. In those cases, risk managers and their brokers must turn to the excess flood insurance market, he said.

Among Louisiana homeowners, though, only 30% to 60%-depending on the parish where they resided-carried NFIP coverage, said Robert Hartwig, chief economist for the Insurance Information Institute in New York. Fewer Mississippi homeowners purchased the coverage, he said.

While mortgage lenders typically require homeowners in flood regions to purchase flood coverage, those banks have no system to ensure that homeowners keep that coverage in force, Mr. Hartwig said.

Those banks will have to swallow a huge uninsured loss when homeowners who cannot afford to rebuild without insurance walk away from their property and loan commitments, Mr. Hartwig said.

Other commercial risks, though, likely will generate a much greater percentage of insured business interruption losses than is typical in large natural disasters, "because we're effectively abandoning a major American city," Mr. Hartwig said.

He noted that business interruption losses accounted for about one-third of the losses caused by the hurricanes last year. Mr. Hartwig said he expects business interruption to account for 40% to 50% of the insured Katrina losses.

But calculating the exact extent of losses will be more challenging and time-consuming than in past losses, adjusters said.

"There's no question, in my opinion, that this is going to stretch the industry," said Thomas Crawford, president and chief executive officer of Atlanta-based Crawford & Co.

Adjusting losses "is not the number one priority right now," said Steven Boyer, a St. Louis-based vp with third-party administrator Gallagher Bassett Services Inc., a subsidiary of Arthur J. Gallagher & Co. Rescuing victims and moving them to safe quarters is the top priority for now, he said.

Once that effort has been completed and adjusters-who will be offered inoculations against various diseases-are allowed into storm-damaged areas, covering the breadth of the area that Katrina hit will be a daunting task, adjusters said.

"I think the widespread devastation is a lot different than we've had in the past," Mr. Boyer said.

"In my working lifetime, the closest thing was Andrew. But that was not as widespread or as devastating," he said. While Andrew demolished Homestead, Fla., "people could move around the area," unlike in New Orleans and Biloxi, he said.

In addition, the disruption in cell and landline phone service has created problems in communicating with clients and home offices.

But Crawford is using two satellite trucks that will provide its adjusters wireless phone service and wireless Internet communication, Mr. Crawford said.

Adjusters say their troops are mobilized and ready to start work in the hardest hit regions when they become accessible, but that they will focus on those areas they can reach in the meantime.

When adjusters get there, they will face a central question, said Franklin Horowitz, president of Claims International Inc., a Voorhees, N.J.-based adjuster. "The question is: Is it wind or is it flood?" In some cases, a business could buy wind and flood coverage, with different limits, from different insurers, he said.

"There will also be 'meteorological issues,"' said Mr. Horowitz, such as determining "when did the wind come in? When did the flood come in?" and "Were windows blown into the house, or were they blown out of the house."

The phone service outages could mean some heavy, but insured, extra expense losses for the phone companies themselves, according to Alfred Tobin, managing director-property syndication at Aon Risk Services Inc. in New York.

For the telecommunications industry, those losses likely will total in the "tens of millions of dollars" after deductibles, Mr. Tobin said.

Cell and landline phone companies were scrambling to restore service where possible last week, representatives reported.

For example, Sprint Corp. of Reston, Va., could not access many flooded cell sites in New Orleans to replace or refuel generators.

In addition, it could not access some landline facilities. Wireless service ultimately depends on one or more switching operations involving operating landlines, a spokeswoman said.

Cell and landline phone companies typically retain 3% to 5% of their windstorm-related losses, and most purchased flood insurance, Marsh's Mr. O'Brien noted.

But, in most cases, the extremely tough market for transmission and distribution lines has forced phone companies to self-insure that asset, he said.

But unlike most industries caught up in a natural disaster, national cell phone companies likely will not generate business interruption claims, Mr. Tobin noted. That's because cell phone usage increases dramatically around the time of a catastrophe, which leads to revenue spikes. As a result the phone companies don't experience a loss of profit in their coverage period.

Energy sector hit

Oil and gas companies also had few solid loss figures, but one broker expected that the insured damage to offshore operations would be significant.

"Based on the path of the hurricane, and the location of offshore rigs and platforms, we expect that the damage will be similar to Hurricane Ivan, which generated roughly $2.7 billion in total offshore losses" last year, said Joel Phipps, a senior vp at Aon Risk Services in Houston.

Irving, Texas-based ExxonMobil said on Aug. 30 that its offshore Eastern and Central Gulf of Mexico platforms, as well as its onshore and offshore Mobile Bay operations, remained shut down. It said that it had evacuated about 430 employees and contractors from its platforms before the hurricane struck.

Houston-based Apache Corp. reported that it had lost the use of eight of its gas and oil platforms in the Gulf of Mexico. The company said that it had $150 million in business interruption insurance "to help defray the cost of an extended shut-in," or cessation of operations.

A source said the losses would exceed the company's property and business interruption coverage.

As of last Thursday afternoon, nearly 52% of oil platforms and 48% of oil rigs in the Gulf of Mexico were still evacuated.

Lost gas and oil production from Aug. 26 through Sept. 1 totaled 1.2% and 1.4%, respectively, of annual production from the Gulf, according to government reports.

Casinos destroyed

In Biloxi, brokerages reported that about six casinos moored in the Gulf were destroyed and that others in the area survived but were damaged.

News video showed one facility, the Grand Casino, completely submerged.

Business interruption coverage for casinos typically carries a deductible of five to 20 days, according to Dana Berry, director of hospitality and gaming for Aon Risk Services Inc. of Chicago. After the deductible, coverage is based on annual profit prorated on a daily basis, though some policies provide additional coverage for losses that occur during peak seasons, Mr. Berry said.

Policies, which vary from risk to risk, also may include coverage for ordinary payroll, Mr. Berry said.

Casino management and state gaming officials could not be reached for comment because of phone outages.

But according to the Mississippi Gaming Commission's Web site, casinos in the state's Gulf Coast counties generated nearly $769.6 million of gross revenues from January through July, with a minimum of about $101 million of monthly revenues.

Brokers reported that the storm surge swept the Silver Slipper Casino from its moorings and pitched it onto a nearby Holiday Inn.

An Atlanta-based spokeswoman for InterContinental Hotels Group P.L.C. said the management for that Holiday Inn franchise was among those for 30 affiliated hotels in Katrina's path that InterContinental had been unable to reach. The hotel chain was able to reach about 50 other hotels in the storm's path, which sustained various degrees of damage.

Hotel franchises arrange their insurance individually, according to the spokeswoman.

Among other losses:

• The Hyatt Regency New Orleans is likely "well covered" for its damages, which have not been estimated yet, said James Mead, an executive vp and the chief financial officer for the hotel's owner, Strategic Hotel Inc. of Chicago. The storm blew out more than 500 windows in the hotel, which suffered extensive water damage from wind-driven rain, he said.

  The hotel, which is adjacent to the SuperDome, is serving as the home to the mayor and his office as well as to some hotel employees and their families, Mr. Mead said.

• Dallas-based Tenet Healthcare Corp. reported that its five hospitals in the New Orleans area and one in Biloxi, Miss., "suffered considerable water and wind damage from Hurricane Katrina, and three of them have been forced to evacuate all patients and staff."

  Tenet said that while it did "not yet have an estimate of the damage or other financial impact caused by the hurricane," it "anticipates that the cost will be significant even after taking into account its existing insurance coverage for property damage and business interruption."

• Bentonville, Ark.-based Wal-Mart Stores Inc. reported that 38 of its stores remained closed late last week. But that "number is a very fluid one," a spokeswoman said. She noted that one store in New Orleans had been the target of looters.

• Las Vegas-based Harrah's Entertainment Inc. reported that its estimated uninsured operating loss from the closure of casinos in New Orleans and the Mississippi Gulf Coast would amount to approximately 0.5% of annual earnings before interest, taxes, depreciation and amortization.