Hurricane Sally is likely to cause significant losses for the US National Flood Insurance Program (NFIP) after dumping torrential rain over Alabama and the Florida Panhandle, AM Best says.

Sally made landfall as a category two hurricane early on Wednesday, bringing rain totals of more than 61cm in some areas as it moved at a slow pace.

The NFIP estimates only eight of the roughly 50 counties vulnerable to moderate to high flash flood risk from Sally have more than 25% of properties insured.

“Given this dynamic, the gap between insured and economic losses is likely to be wide,” AM Best says. “As more than two-thirds of flood coverage written in Alabama is federal, flood losses for the NFIP will be significant.”

The NFIP offers up to $US250,000 ($343,000) in cover for a home and up to $US100,000 ($137,000) for belongings, with the policy able to be supplemented or replaced by private cover.

AM Best says the NFIP provides about 82% of the coverage for flood in Alabama, but some private insurers have significant exposure. The private insurance industry is also exposed to auto claims due to flooding and storm surge, and as rain from Sally extends across a wider region.

On the other side of US, California and other western states are continuing to battle wildfires, with Moody’s estimating insured losses could reach $US5-8 billion ($6.9-11 billion).

The California Department of Forestry and Fire Protection (Cal Fire) says some 27 major wildfires are burning in the state, which historically experiences some of its worst conditions in September and October.

“Since August 15, when California’s fire activity elevated, there have been 26 fatalities and over 6100 structures destroyed,” it said today.