The wildfire that destroyed the Fort McMurray region in Canada's Alberta province is expected to incur the largest insured property losses from a single disaster in Canadian history.

An estimated 1,600 homes, small businesses and other structures were destroyed in the wildfire in Fort McMurray, the oil city in the northeastern part of Alberta, since Sunday.

Capital Markets analyst Tom MacKinnon from the Canadian bank BMO said in a report on Wednesday that the insurance losses was estimated between 2.6 billion Canadian dollars (2 billion US dollars) and 4.7 billion Canadian dollars (3.6 billion dollars).

This amount of money would likely to be "by far the largest potential catastrophe loss in Canadian history," he said.

But some experts believe the initial estimates of insured losses often tend to be low. And that could push the ultimate price tag for the Fort McMurray disaster toward the high end of MacKinnon's current range of estimates.

Glenn McGillivray, managing director of the Toronto-based Institute for Catastrophic Loss Reduction, said people try to use models to estimate insured losses and the models have proven to be inaccurate.

A key factor that tends to drive costs up is "demand surge," McGillivray said, "So when you get a big loss, the price of contractors and building materials often goes up because demand is so high. That's sometimes hard to capture in models."

He said the insurance companies were now gathering the catastrophe teams, and once the burning city was cleared, the team would go with their customers to their burned houses to make insurance estimates and get the payment process going.