Losses to private insurers from Hurricane Katrina could reach a record $60 billion, and total economic losses may top $125 billion, according to a California-based disaster modeling company.

The estimates by Risk Management Solutions Inc. are up sharply from last week and reflect a clearer picture of the extent and depth of the flooding in New Orleans, said RMS vice president Laurie Johnson.

The company now expects privately insured losses to range between $40 billion and $60 billion, with $15 billion to $25 billion of that attributable to the New Orleans flood. Earlier, it estimated insured losses at $20 billion to $35 billion.

RMS also estimates that claims on the government's National Flood Insurance Program will be about $10 billion, Johnson said.

But the extent of the damage is still hard to gauge. "There are no benchmarks for the evacuation of a large, vast urban area," she said.

It is clear now that many buildings and other property in New Orleans could be immersed for weeks and that there will be a protracted period before owners can return. This may mean that property that survives the flood will be lost or damaged by fire, wind, looting or other perils.

Given the forced evacuation, it is uncertain how much of those losses insurers could be required to pay, Johnson said. Some homeowners' policies cover temporary living expenses, but that typically envisions a relatively short period while the home is being repaired.

Public health is likely to be a key factor in allowing residents to return, but authorities have little experience in evaluating those risks and deciding when neighborhoods and houses are safe to live in.

"There are groundwater contamination issues that potentially could affect public water supplies over a large area," Johnson said.

Much of the increase in private insurance loss estimates is from New Orleans and stems from damage to large commercial structures and from business interruption coverage, she said.

Although flood damage generally is not included in homeowners' policies, it is in some policies for businesses and high-value homes.

"Distinguishing the portion of damage attributable to wind or flood will be difficult in many areas that were impacted by winds in excess of 100 mph. The final insured loss from Hurricane Katrina will depend on how flood claims are apportioned," the company said in a statement