Auto Insurance losses from katrina likely big

NEW YORK, Sept 1 (Reuters) - Automobile insurance losses from Hurricane Katrina could be very significant given the extent of the flooding, Merrill Lynch & Co. said on Thursday.



While damage caused by flooding is not covered under a homeowner's policy, it is typically covered under an auto insurance policy.



"Given the extent of the flooding in Louisiana, Mississippi, and Alabama, thousands of cars have been swallowed up by the rising waters," Merrill analysts said, adding that usually when a car is completely submerged it is deemed a total loss.



The flooding from Katrina also appears to be far worse than that of the major hurricanes that made landfall in 2004, Merrill said.



Merrill said many families evacuated the area in one car, but likely left another at home.



Progressive Corp. (PGR.N: Quote, Profile, Research) is a big auto insurance underwriter in the affected states of Louisiana, Mississippi and Alabama.



As of 2003, Progressive, State Farm Mutual Automobile Insurance Co. and Allstate Corp. (ALL.N: Quote, Profile, Research) were the three largest auto insurers in the United States, according to the Insurance Information Institute.