Aug. 18 (Bloomberg) -- Hurricane Charley will probably cost insurers $7.4 billion, according to the first loss estimate based on insurance claims.

The Insurance Information Institute, a New York-based industry group, made the estimate after canvassing the biggest insurers in Florida, where the storm hit on Friday, said Robert Hartwig, the institute's chief economist. Other forecasts have been derived from computer models of the storm.

``It's a preliminary estimate based on what's going on, on the ground,'' Hartwig said. ``While formidable, Charley falls generally within the range of catastrophic risk that insurers anticipated and built into insurance premiums.''

The $7.4 billion figure, which makes Charley the most costly storm in U.S. history after Hurricane Andrew, is in line with the $6 billion to $8 billion of losses predicted yesterday by storm modeler Risk Management Solutions Inc. Munich Re, the world's biggest reinsurer, estimated on Monday that claims would be between $7 billion and $14 billion.

The largest insurer of hurricane damage in Florida is Citizens Property Insurance Corp., a state-chartered company that provides policies to consumers who can't find coverage in the private market, the institute said. Many of Citizens' policies are just for wind damage.

Charley slammed Florida with sustained winds of 140 mph (225 kph), wrecking homes, toppling trees, cutting power and causing at least 20 deaths. Hurricane Andrew, when it hit southern Florida in August 1992, cost insurers $15.5 billion, or $20.3 billion in today's dollars, the institute said.

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