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A Rockport, Tex., resident exits his house through a window on Monday while surveying damage wrought by Hurricane Harvey. Analysts expect homeowners to be financially hard-hit by the fallout from the storm.

Eric Gay/AP

Tropical storm Harvey could become one of the most costly storms in U.S. history, as insurers tally up the damage from a storm that continues to pour water over the Gulf Coast.

Insurance stocks closed lower on Monday, with Allstate Corp. down 1.49 per cent, Travelers Cos. Inc. down 2.56 per cent, Chubb Ltd. down 1.29 per cent, Hartford Financial Services Group Inc. down 0.98 per cent and Progressive Corp. down 2.25 per cent.

State Farm, Allstate and Farmers Group Inc. have the largest shares of the homeowners' and commercial property insurance market in Texas.

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Related: Gas prices rise as Harvey batters Texas refineries

J.P. Morgan analyst Sarah DeWitt estimates that the storm could lead to $10-billion to $20-billion (U.S.) of industry-insured losses. That is up from early insured loss estimates of $1-billion to $6-billion. The numbers exclude flood-losses, which are not covered by most homeowners' policies.

Flooding "could result in meaningful losses for the commercial reinsurers and insurers," Ms. DeWitt wrote.

However, Kai Pan, an analyst with Morgan Stanley, cautioned against excessive worry over Harvey's effects. "While it is too early to gauge ultimate losses, the industry's balance sheet is strong, with plenty of excess capital and an influx of alternative capital," Mr. Pan wrote in a research note. "We think Harvey could help stabilize global reinsurance pricing, but do not expect a major turn in pricing to follow."

Elyse Greenspan, an analyst with Wells Fargo Securities, agreed. "We continue to believe that significant insured losses are needed to change the pricing trajectory," Ms. Greenspan wrote in a research note. Such a scenario could lead to higher insurance premiums.

"It is our view that you would need a series of losses impacting the balance sheets of insurers … to have a material impact on the pricing environment in either the primary insurance side or the reinsurance marketplace."

Homeowners are likely to be particularly hard-hit by the fallout. Flooding is covered under most commercial and auto insurance policies, but generally not under private homeowners' policies. That coverage falls to the National Flood Insurance Program (NFIP), which provides eligible properties with flood insurance.

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"Unfortunately, a large portion of the flood loss is likely to be uninsured given the fairly low NFIP take-up rates," wrote Steve Bowen, a meteorologist from the reinsurance company Aon Benfield's Impact Forecasting team.

Harvey made landfall on Friday near Corpus Christi, Tex., as a Category 4 storm. At least two people have been reported killed.

Some areas may have total precipitation of 127 centimetres by the end of the week.

The storm has also rocked the petroleum industry, with floods knocking out approximately one-tenth of U.S. refinery capacity. U.S. gasoline prices hit two-year highs on Monday, with spot prices for U.S. gasoline futures rising as much as 7 per cent. U.S. crude futures fell 2.7 per cent to $46.57 a barrel.

According to Ms. Greenspan, "the insured losses borne by the industry should most likely end up being below that of Hurricane Ike," the last major hurricane to hit Texas. Her research note said the 2008 storm resulted in losses of $14.1-billion in 2016 dollars.

Her report said U.S. hurricane losses (excluding flood damage) range from $49.8-billion in 2016 dollars for Katrina in 2005 to $5.76-billion for Frances in 2004.

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