Losses in the Caribbean will add another one billion to 2.5 billion to that total, the firm said. The most extensive damage will be to mobile homes, roofs and light commercial structures in an area stretching from Mobile, Alabama, to Pensacola, Florida, AIR said.

Meanwhile, modeling firm Risk Management Solutions reduced its estimate of insured losses from Hurricane Ivan after the storm made landfall just to the east of Mobile bay, cutting the potential for major flooding.

The firm now expects losses of between two billion and seven billion dollars, with an additional one billion to two billion dollars of losses in the Caribbean.

It had forecast losses of as much at 20 billion dollars earlier in the week, when Ivan was headed toward New Orleans.

President George W. Bush declared Alabama a disaster area, along with large parts of Florida, making those counties eligible for federal disaster relief.

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