The most recent estimates by risk agencies indicate that insurers will have to pay out between $US6 billion and $US10 billion as a result of Hurricane Charley.

The storm, which swept across Florida and into North and South Carolina, is the second most costly in US history. Hurricane Andrew caused $US15.5 billion in insured losses in 1992.

As usual, the location of the storm was important. Just as Andrew narrowly missed Miami in 1992, Charley passed south of Orlando, a densely populated area with high property values. A large proportion of the payout is expected to be associated with residential policies.

Following Hurricane Andrew, the Government in Florida established state-sponsored insurance schemes, the Florida Hurricane Catastrophe Fund and the Citizens Property Insurance Corporation. These insurers are expected to absorb much of the loss.