Catastrophe modeling firm AIR Worldwide has forecasted that Hurricane Isaac will cause insurance losses between $700m-$2bn in the US.

The calculation of losses includes wind and storm surge damage to onshore residential, commercial and industrial properties and their contents, automobiles, and time element coverage.

According to AIR’s loss estimates, insurers will pay 10% of modeled storm surge damage as wind losses for residential lines, while insurers will pay 100% of storm surge damage for the automobile line.

Commercial lines estimates include insured physical damage to structures and contents, and business interruption directly caused by storm surge, assuming a 10% take-up rate for commercial flood policies; business interruption losses include direct and indirect losses for insured risks that experience physical loss.

AIR does not expect significant physical damage to offshore oil rigs and gas platforms either from wind or waves as well as no major insured losses to offshore assets in the Gulf of Mexico.