This Hurricane Season May See a Key FEMA Disaster Fund Run Out of Money

Many of the nation’s disaster organizations are exposed to perilous financial risks at the start of hurricane season, jeopardizing efforts across much of the U.S. to recover from catastrophes.

Financial crises threaten to ricochet throughout Gulf Coast states and force people to pay surcharges on insurance premiums for years to come, and communities nationwide could lose funding from the Federal Emergency Management Agency for disaster recovery.

Several factors are causing the financial problems: enormous costs from storm damages since 2020 including Hurricane Ian in September, a shaky insurance industry and unprecedented disaster spending by FEMA.

Taken together, the financial risks reflect a nation facing rising disaster damage due to climate change and development in risky areas, and a disaster-finance system that’s ill-equipped to pay the costs as hurricane season began Thursday.