As the devastation from Hurricane Katrina becomes more clear and property loss estimates continue to be revised upward, insurers say they should be able to pay the claims.

Insurance experts say the industry is prepared to withstand the cost of the claims without threatening its own solvency.

The National Association of Insurance Commissioners (NAIC) says the industry maintains enough capital and liquidity to handle the avalanche of claims that is expected.

Insurers are “up to the task of making good on the promises that they have made to American businesses and consumers through their insurance policies," said Diane Koken, NAIC President and Pennsylvania Insurance Commissioner. "Some smaller insurance companies will experience financial distress, but the overall condition of the industry should remain healthy."

The total insured and uninsured losses suffered in Louisiana, Mississippi and Alabama from the hurricane and subsequent flooding are estimated to exceed $100 billion. Risk Management Solutions Inc., which conducts computer risk modeling of damages from catastrophes, put insured losses at $20 billion to $35 billion.

"There is a lot of variability" in loss estimates so far, Robert P. Hartwig, chief economist at the Insurance Information Institute, told the Washington Post. He said that insurers are expecting more than 1 million claims. Adjusters are already at work in some areas, though not yet in New Orleans.

Taxpayers will bear the brunt of perhaps $60 billion to $70 billion in costs, as municipalities must repair roads, bridges and other infrastructure that were self-insured.

Also, Tom Upton, a financial services analyst with Standard & Poor's, said insurance rates will rise. “Who else is there to pay the bill except ultimately the consumer?" he said. Hartwig, however, said the effect should be limited to high-risk areas. "That's been the case in Florida. But those effects are isolated to the states likely to be impacted."

Other experts say that drivers, as well as homeowners, will see insurance rates rise. Facing up to $1 billion in damage to cars by Hurricane Katrina, auto insurance rates could increase 5 to 10 percent, Donald Light, senior analyst for Celent, told USA Today.

One top state insurance official called on Congress to create a national catastrophe fund to help the insurance industry pay claims. "It's tragic but often times we need an event like Katrina to prod us into action as a country," Howard Mills, superintendent of the New York State Department of Insurance, told CNN.com. "A national catastrophe fund pool would provide the funds and resources to help rebuild capacity very quickly."