Today, the NFIP is effectively bankrupt. It owes the U.S. Treasury nearly $25 billion – money it borrowed from federal taxpayers to cover its obligations in Sandy, Katrina (2005), and Hurricane Ike (2008). No one expects that money to be repaid. Some coastal state lawmakers are even calling for Congress to write off the massive debt, contending it is the only way the troubled insurance program, which is up for reauthorization this year, can regain its financial footing.

Wiping away the debt will help. But it is only a matter of time until the next big storm drains the coffers again. Even relatively weak hurricanes cause hundreds of millions in damage, while monster storms like Katrina and Sandy cause billions. Complicating matters, the NFIP has improbably subsidized thousands of risky properties along the coast – low-lying houses that flood over and over – by charging them below-market premiums to entice them to join the program.

Now the federal flood program faces no less than an existential threat. As seas rise, coastal floodplains are expected to expand, exposing more property to routine flooding, surge, and waves. By some estimates, hundreds of thousands of U.S. houses could be underwater by century’s end and a trillion dollars worth of property at risk. Much of Long Beach Island’s heavily insured housing could be covered by several feet of water twice a day at high tide, rendering it inaccessible except by boat. Meanwhile, the average losses for each flood policy could increase by half, according to a 2013 government study, leading to sharp increases in premiums that price out all but the wealthiest property owners.

Elevating homes above predicted flood levels and adopting other mitigation strategies will help in the short run, says Robert E. Kopp, an expert on climate change and sea level rise at Rutgers University. But not enough coastal communities are taking the long-term threat seriously. “So what we have is a lot of changes on the margins,” Kopp said.

The NFIP also lacks a reserve fund to help cover losses from catastrophic storms like Sandy. Instead of charging a little more and setting aside money, the way private insurers do in other lines of business, the federal flood program relies on the U.S. Treasury – taxpayers – as its financial backstop, or reinsurer. In 2013, the NFIP finally added a 15 percent assessment to its flood policies, and gradually built up about $1 billion in reserves. But an epochal 2016 flood in Louisiana used up that money.

Many Americans probably associate the NFIP with floods along the Mississippi River and other inland bodies of water. The program does cover those floods. And with climate change spawning monsoonal deluges in Texas, Louisiana, and other places, the risks are significant.

Read the full article about the NFIP by Gilbert M. Gaul at Yale Environment 360.