Hurricane Isaac, the slow-moving storm lumbering north across the Gulf of Mexico, is expected to impact a coastal area with more than $480 billion of insured property, according to disaster-modeling company AIR Worldwide.

But the storm, with sustained winds of 75 miles per hour, won't cause nearly that much damage. Michael Kistler of Risk Management Solutions said Isaac was similar to Hurricane Gustav, which caused about $2 billion in damage to insured property when it made landfall in Louisiana in 2008.

Insurance-industry experts said most structures in the storm's affected area in Louisiana, Mississippi and Alabama will easily withstand Isaac's gusts, but they warned that flooding could pose a greater threat.

"This is probably going to be more of a water event than a wind event," said Brion Callori, a senior vice president for engineering and research at business-insurer FM Global. "It's not just the coastal areas that will be affected. It's going to go inland."

The first round of flooding from Isaac will come from storm surge, the wall of water that blows ashore with a hurricane. Forecasts call for a surge of as much as 12 feet in some coastal areas, and Isaac is scheduled to make landfall around high tide Wednesday, which will exacerbate the inundation.

"It's very wide, and it's trapped within the Gulf of Mexico," said Erik Nikodem, an executive vice president at Lexington Insurance, a unit of American International Group Inc. (AIG). Combine those factors with its slower-than-expected speed, and "that means the storm surge just continues to increase," he said.

Isaac will blow ashore on the seven-year anniversary of Hurricane Katrina, which cost the insurance industry more than $40 billion in 2005. But Mr. Kistler said Gustav offered a closer comparison, given Isaac's intensity.

No two storms are alike. Mr. Kistler said Gustav packed "more horsepower" as a Category 2 hurricane, and Isaac, a Category 1 storm, is larger and moving more slowly. Still, with its $2 billion price tag, "it caused what we think to be in the ballpark of the losses" that will be caused by Isaac, he said.

Far more than half of Gustav's losses were tied to home insurance, but Isaac's potential to deliver massive flooding may leave some homeowners in a lurch. Floods aren't covered under standard home-insurance policies, and homeowners who need flood insurance typically must buy it from the federal government.

Commercial insurers such as AIG and FM Global typically cover flooding in their property policies. Mr. Nikodem and Mr. Callori said their companies were reaching out to clients in areas that may be affected by the storm and plan to send in adjusters as soon as the danger has passed.

The $480 billion estimate from AIR measures insured property in the coastal counties within Isaac's expected impact area. The figure amounts to about 21% of the insured exposure for Louisiana, Mississippi and Alabama combined.

Write to Erik Holm at erik.holm@dowjones.com

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