Travelers Property Insurance Corp. (NYSE: TAP.A) could use a Motley Fool credit card right about now -- one with a low interest rate. The nation's third-largest insurance company is taking a $1.3 billion charge ($2.5 billion pre-tax) in its fourth quarter to increase reserves against asbestos-related lawsuits.

After the charge, Travelers will have $3.4 billion in reserve for the lawsuits, which are proving to be more "annoying" than estimated. Following rampant use of asbestos in the 1970s (we hear even toothbrushes were made of the stuff back then -- OK, no, not really), national asbestos claims are expected to total $200 billion when all is said and done. Most claims against corporations are paid by insurance companies.

Travelers was spun off from Citigroup(NYSE: C) last year, but the latter agreed to give $800 million toward the lawsuits. Of Travelers' $2.5 billion charge, Citigroup is paying $555 million (completing its agreement), and reinsurers are doling out $670 million. Still, the charge takes a big bite out of Travelers' earnings.

The company will post a loss of $790 million, or $0.79 per share, for the fourth quarter of 2002, and all earnings for the first nine months of 2002 will be snuffed out. For last year, Travelers expects to lose $27 million, or $0.03 per share. In 2003, it anticipates earning between $1.69 and $1.79 per share.

Insurance companies aren't the only ones fighting asbestos suits. Just yesterday, the Big Three auto makers -- General Motors(NYSE: GM), Ford(NYSE: F), and DaimlerChrysler(NYSE: DCX) -- were dealt a setback when the U.S. Supreme Court denied a request to consolidate thousands of claims against an auto parts supplier (bankrupt Federal Mogul) into one claim. Seeing red, claimants are suing for exposure to asbestos in brake parts.