State Farm Increases Its Estimate of Northridge Quake Cost to $1 Billion : Damage: The upward revision means the cost of insured loss will far exceed the industry’s initial guess of $2.5 billion.

State Farm Mutual Automobile Insurance Co., California’s largest homeowner insurer, on Friday raised its estimate of insurance losses from the Northridge earthquake to $1 billion from an initial estimate of $600 million.

State Farm’s announcement, the latest in a series of sharp upward revisions of loss projections, assures that the final total of insured damage from the Jan. 17 quake will far exceed the insurance industry’s initial estimate of $2.5 billion. In fact, the latest estimates of just four companies--State Farm, Allstate, Farmers and 20th Century--now total $2.525 billion alone.

Some insurance analysts say the total may reach $4 billion, making the quake the third-most costly disaster in U.S. history for insurance companies--behind 1992’s Hurricane Andrew, at $18 billion insured losses, and 1989’s Hurricane Hugo, at $4.2 billion.

The State Farm estimate leaped upward not because the insurer is receiving more claims than expected but because individual claims “are coming in a lot more severe than anticipated,” spokesman Bill Sirola said. State Farm said it had received 100,000 claims as of Friday and expected that number to level off at 103,000 claims.

On Monday, Allstate raised its estimate of claims payments to $600 million from $350 million. Last week, 20th Century raised its estimate to $325 million from $160 million. Farmers Group has projected payments of $600 million.