NEW YORK (CNN/Money) - Hurricane Katrina may cost the insurance industry between $12 billion to $25 billion, according to risk modeling firm Eqecat.
The Oakland, Calif.-based company previously estimated that the hurricane, which slammed into Louisiana early Monday, would have cost the industry between $15 billion and $30 billion.
Even with the revision, Hurricane Katrina could still end up as the costliest storm ever for U.S. insurers. Hurricane Andrew previously held that distinction, causing $15.5 billion in insured damage.
"The reduction was based off the fact that winds were lower than expected and the track of the storm is 25 miles to the east of the expected track last night," said Tom Larsen, senior vice president of Eqecat. "That puts New Orleans onto the lean side of the hurricane."
He said storm surge is still expected to jump as much as 28 feet in areas. About 70 percent of New Orleans is below sea level and is protected from the Mississippi River by a series of levees.
The firm added that its estimates don't include any potential damage to oil rigs in the Gulf of Mexico.
Larsen said in 2004, Hurricane Ivan cost the insurance industry about $2 billion in damages to oil rigs. But Katrina's trajectory places the storm in an area with even more oil platforms with higher winds, increasing insurers' risk of exposure.
As of 9 a.m. ET Monday, the storm was centered about 40 miles southeast of New Orleans, Louisiana, and 65 miles southwest of Biloxi, Mississippi.
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