Quake Tab for Insured Damage at $4.5 Billion : Claims: New industry estimates make the Jan. 17 Northridge temblor the No. 2 insurance disaster in U.S. history.

The insurance industry Thursday raised its official estimate of insured damage from the Northridge earthquake to $4.5 billion, making the Jan. 17 quake the second-worst insurance disaster in U.S. history behind 1992’s Hurricane Andrew.

The revised estimate by the Property Claims Services division of the American Insurance Services Group Inc. was nearly double the trade organization’s initial $2.5-billion figure, released in February.

For weeks, insurance analysts have been expecting a sharp upward revision in the damage tally as companies hiked their individual loss estimates.

Among the largest insurers, State Farm’s estimate climbed to $1 billion from $600 million; Allstate’s was $600 million, up from $350 million, and 20th Century’s was $325 million, up from $160 million.

The insured loss total is far lower than the overall damage caused by the 6.8-magnitude Northridge quake, since it does not include damage to uninsured public property such as freeway overpasses and government buildings. Nor does it include losses suffered by people without earthquake insurance or losses that fall below the insurance deductibles.

The Federal Emergency Management Agency said Thursday that its current estimate of overall losses is $13 billion to $15 billion.

“The amount of actual damage to many buildings was not at first visible,” said Gary R. Kerney, spokesman for Property Claims Services.

The extent of the destruction became clearer after construction engineers and other experts visited the damaged buildings, he said.

While the number of expected claims payouts did not grow substantially from the first estimate to the second, the average cost per claim soared.

The trade group now estimates the number of claims on which there will be a payment to reach nearly 260,000, up from its earlier estimate of 230,000. Some 210,000 of the claims will be on residences, 23,000 on automobiles and 25,000 on businesses.

The average payments will be $15,000 on personal property claims (homes and their contents), $55,000 on commercial claims and $1,800 on auto claims, Property Claims Services estimated.

Kerney said it was not unprecedented for the group to dramatically revise its estimate for a large disaster. Initial estimates for Hurricane Andrew also were low. It took six months before a final estimate was prepared for Andrew.

Two major California insurers, 20th Century and Farmers Group, recently were notified that expected quake losses had prompted a review of their financial security ratings.

A.M. Best Co., the Oldwick, N.J.-based ratings agency, said it instituted the ratings reviews after the two carriers had announced their claims estimates.

Worst Insurance Disasters

America’s 20 worst catastrophes in terms of insured losses:

Insured losses Event Date (billions) Hurricane Andrew Aug., 1992 $15.50 Northridge Earthquake Jan., 1994 4.50 Hurricane Hugo Sept., 1989 4.20 East Coast Blizzard March, 1993 1.75 Oakland Firestorm Oct., 1991 1.70 Hurricane Iniki Sept., 1992 1.60 Loma Prieta Earthquake Oct., 1989 0.96 Freezing Rain (41 states) Dec., 1983 0.88 Los Angeles Riots April/May, 1992 0.78 Texas Hailstorm April, 1992 0.76

Source: American Insurance Services Group Inc.