Insurance companies are breathing a sigh of relief Monday after the damage from Hurricane Irene turned out to be less than initially feared.

Allstate (ALL) closed up 8.5% to $26.30. Hartford Financial Services (HIG) soared nearly 13% to $19.42. One exchange-traded fund that tracks insurance stocks, SPDR KBW Insurance (KIE), rose nearly 6%.

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The stocks are getting a boost from new estimates that show the hurricane's cost to insurers fell to about $2.6 billion. Before Irene hit the East Coast, the industry was worried that the cost could be as high as $14 billion.

The total economic losses, including the non-insured portions, could hit $7 billion, Bloomberg reports.

"Insurers may get off pretty easy," an executive at Kinetic Analysis, a company that predicts the effects of disasters, told Bloomberg. "This one’s not the straw that broke the camel’s back."

The damage was much less than that left behind by Hurricane Katrina.

Reinsurance stocks were also flying high Monday. Large insurance companies like Allstate buy their own coverage as well in case of major disasters, and they buy coverage from reinsurers. It looks like Hurricane Irene wasn't damaging enough for many of those reinsurance policies to be impacted, Bloomberg reports.

Rising reinsurance stocks include RenaissanceRe Holdings (RNR), which rose nearly 5% by the close, and Allied World Assurance (AWH), which gained 4.5%.