Increasing reliance on state-run ‘insurers of last resort’ to cover homes so vulnerable to climate impacts private insurers have fled the market represents a looming crisis with no good solutions when the next truly catastrophic fire or hurricane causes widespread destruction. The plans have become “a magic hiding place to disappear risk that just gets too big for the private market,” Milliman actuary Nancy Watkins told Bloomberg.

While mortgage lenders require borrowers to carry homeowners insurance, some who have paid off their homes are choosing to forgo purchasing expensive insurance, according to Inside Climate News, leaving them completely exposed if, and when, a major disaster hits. Nationwide, 39 million properties are vulnerable to flooding, hurricane, and wildfire risks that are not priced into their insurance policies, effectively creating an “insurance bubble,” according to a new analysis from the First Street Foundation.

These underinsured properties are especially common in coastal counties with no flood risk disclosure requirement and where individual homeowners are less concerned about climate change. Nearly 40% of people in the U.S. live near a coastline — precisely where new research published Wednesday in Nature finds current models are under-evaluating the risks posed by sea level rise and land subsidence. On Tuesday, FEMA and the National Association of Realtors, called on Congress to overhaul the National Flood Insurance Program. (Looming crisis: Bloomberg $; First Street analysis: Inside Climate News; Coastal Risk: New York Times $; NFIP: E&E $)