Insured losses resulting from Hurricane Florence will be about $2.5 billion, according to catastrophe modellers Karen Clark & Company.

The estimation includes the privately insured wind, storm surge, and inland flooding damage to residential, commercial, and industrial properties and automobiles. It does not include losses borne by the National Flood Insurance Programme.

The latest number has come down a long way from estimates as high as $20 billion when the storm was approaching the US eastern seaboard as a Category 4 hurricane.

The storm weakened markedly and made landfall last Friday in North Carolina as a Category 1 storm, packing maximum sustained winds of 90mph.

KCC said the peak storm surge from Florence reached 10ft in Bern, North Carolina.

Several areas were inundated after extreme rainfall, of as much as 30 inches in 24 hours. Flooding was exacerbated by storm surge preventing rivers from draining into the ocean.

Yesterday, Florence remained a tropical depression and continued to dump rain on North Carolina.

KCC’s estimate is lower than CoreLogic’s estimate of between $3 billion and $5 billion, which includes damages for both wind and storm surge, but does not include insured losses related to flooding.

Meanwhile, Amit Kumar, an analyst at Buckingham Research, expects reinsurers to bear only about 15 to 20 per cent of Florence losses. In a note, he said that if losses totalled $10 billion, reinsurers and insurance-linked securities could be expected to deal with about $1.5 billion to $2 billion in claims.

Rating agency Moody’s said losses were likely to be split between homeowners, commercial property and business interruption. It added that flood damage is typically not covered by homeowners’ policies.

“This often becomes a point of dispute when the immediate cause of loss (wind versus flood) is unclear,” Moody’s stated.

“However, commercial lines insurers could face losses from flooding, which is typically an optional coverage. Flooding could also cause losses for commercial and personal auto as well as agricultural insurance lines.

“It will take weeks for insurers to have reliable estimates of losses.”