As Hurricane Katrina belts the daylights out of the southeastern US, insurers are already bracing for some whopper payouts. Catastrophe management consultants Eqecat says the damage may cost US insurers as much as $30 billion, making it the most expensive storm to ever hit the US.

After hitting Florida last week, Katrina strengthened to a category 5 storm over the Gulf of Mexico but has now weakened and been downgraded to a category 1 storm after passing over land.

Eqecat, which uses computer modelling to estimate losses, said yesterday that if the hurricane came ashore in the New Orleans area, $150 billion of insured property would lead to $30 billion in claims.

The hurricane caused heavy rain in central Mississippi on Monday night but the coastal storm surge flooding along the northern and northeastern Gulf of Mexico coast has begun to subside.

Insurers paid a record $US22.9 billion last year for four Florida hurricanes. The biggest of them all, Hurricane Andrew, produced about $US20.8 billion in claims when it tore through southeast Florida in 1992.