Final answer:
The NFIP is funded primarily through premiums from policyholders, and may also earn investment income from reserves.
Step-by-step explanation:
The National Flood Insurance Program (NFIP) is funded primarily through premiums paid by policyholders. This is similar to private insurance companies, which as depicted to have money flowing in from premiums and investments. The NFIP, being a government-run insurance program, collects these payments to create a pool of funds. These funds are then used to cover claims and operational expenses when an adverse event, such as a flood, occurs. Additionally, insurance companies and programs including the NFIP can earn investment income by investing reserves -- funds that have been accumulated but not yet paid out in claims. These investments are usually made in safe, liquid assets for easy access in times of need.