When it comes to grappling with the effects of climate change, insurance companies could be on the verge of failing the very people they’re meant to protect.

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According to a new reportfrom Ceres, a sustainability-minded business nonprofit, the insurance industry has been relying on deflating financial reserves while being struck with record catastrophe damages—last year, the United States suffered an estimated $55 billion economic loss due to severe weather damages alone, and the $44 billion paid in insured losses for weather and catastrophes was the highest since the year Hurricane Katrina devastated the Gulf Coast. Meanwhile, the industry’s pricing models still follow outdated risk assessments, lacking plans for more extreme scenarios. The report argues that insurance companies’ inability to adapt to current climate reality could result in unaffordable rates, loss of coverage where it’s needed most, or force government into the role of last resort insurer, which would place more burden on taxpayers.

Sharlene Leurig, one of the report’s co-authors, believes the insurance crisis that’s plagued hurricane-prone Florida, for example, could play out on a national scale. When private insurers hiked their rates or simply pulled out of the area due to frequency of disaster, state-run insurance stepped in, providing cheap, subsidized premiums that encouraged development in vulnerable coastal areas. “The only way Florida was able to fuel its real estate boom was because of cheap insurance,” Leurig told Mother Jones. But, “when the next Hurricane Andrew hits Florida, is there actually going to be insurance waiting for them?

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