About 200 houses on this island of pristine white beaches were destroyed by Hurricane Katrina, and while the damage has devastated residents, it may rock the government's national flood plan.

The Federal Emergency Management Agency has made more than $200 million in flood payments in the area over the years, much of it to rebuild properties repeatedly flooded by hurricanes.

In fact, overall losses from Katrina and Rita are expected to so overwhelm the National Flood Insurance Program, which FEMA oversees, that for the first time the agency is considering cutting off coverage for some properties.

"We've made it very clear that we're unhappy with the number of losses we have," said FEMA spokesman Butch Kinerney. "We want to be able to make it so that people can protect themselves, but we need to take a hard look on maybe doing more buyouts and stop paying those claims."

FEMA says that properties with repeated claims are among the biggest drains on the flood program. From 1978 to 2004, more than 50,000 properties nationwide have had multiple claims totaling about $2.7 billion, according to agency data.

A 1998 study by the National Wildlife Federation found that while 2 percent of properties insured by the NFIP sustained repeated flooding, they were responsible for about 40 percent of the total loss payments.

Many of these properties - built before modern building codes and the creation of flood insurance maps - were "grandfathered" in when the National Flood Insurance Program was created in 1968.

Even so, the flood insurance program historically has been able to sustain itself through premiums. In some years of severe flooding, it has had to borrow money from the U.S. Treasury and pay it back later. As of April 2005, the program had borrowed $4.3 billion and had paid back all but $200 million.

Katrina was not the first time Kathy and Steve Beasley of Burleson, Ala., had a flood insurance claim on their beach house on Dauphin Island, where about 75 percent of the homes are vacation houses. They've suffered Hurricane Ivan and numerous tropical storms.

They had hoped to meet with their insurance adjuster two weeks ago; instead they were assigned a new adjuster and still have not been told what will be covered.

Before this year's hurricanes, the agency said it was examining the future coverage of about 10,000 repetitive flood-loss properties - those with four or more flood losses, or two or three losses that cumulatively exceed the value of the building.

Over the life of the NFIP, changes have been made to encourage communities to develop flood plain management and to encourage more homeowners to purchase flood insurance. The program was initially voluntary.

Building codes on Dauphin Island have changed over the years to fortify the houses. Higher elevations, thicker pilings and sturdier shingles are now required.

"Anytime you've got a community like Dauphin Island you've got a significant economic impact if you start losing the properties. If you lose 10 houses, you also lose a restaurant and a grocery store that serve those people," said Kinerney.

But critics question whether offering insurance promotes development in dangerous areas and have suggested an increased buyout program to move people out of areas that flood frequently.

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