Insurance Deserts in the US: Causes, Impacts and Solutions

Insurance deserts — where insurance costs and availability make it difficult or impossible to obtain insurance coverage — are becoming a growing obstacle for many Americans. Caused by climate change and other factors that increase the risk of coverage or make it unprofitable for insurers to remain in an area, many companies are raising prices or ending policies, making it more difficult to find affordable coverage.

Keep reading to learn more about what an insurance desert is, the types of insurance most affected — including home insurance deserts and health insurance deserts — and potential solutions for getting coverage.

On This Page

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  What Are Insurance Deserts?

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  Where Do Insurance Deserts Exist?

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  How Do Insurance Deserts Form?

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  Types of Insurance Deserts

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  Who Is Most Affected by Insurance Deserts?

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  How Do I Know if I'm in an Insurance Desert?

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  What Can I Do if I'm Living in an Insurance Desert?

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  Options for People Living in Insurance Deserts

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  FAQs

What Are Insurance Deserts?

Insurance deserts are areas where insurance markets no longer offer affordable policies or cease providing coverage altogether.^[1] In these areas, consumers face limited choices — sometimes none — which can result in significant out-of-pocket costs if their property is damaged or they require expensive health care.

Where Do Insurance Deserts Exist?

Insurance deserts can exist anywhere considered too high-risk or unprofitable for insurers to operate. For example, states prone to natural disasters — such as Florida, Louisiana and North Carolina with hurricanes or California with wildfires — have seen insurers pull out of the home insurance market or limit coverage options for homeowners and renters insurance.^[2]

States with health insurance deserts often include those that have not adopted Medicaid expansion, such as Texas, Wyoming and Florida, leaving many residents with fewer affordable health insurance options.^[3] Rural areas may also experience health insurance deserts, as smaller populations make it more challenging for insurers to spread risk, resulting in fewer plan options.^[4]

How Do Insurance Deserts Form?

Insurance deserts form when insurers end or severely limit coverage in a given area. Companies often pull out of markets after they are deemed too high-risk — for example, following a series of severe natural disasters.^[1]

Types of Insurance Deserts

Insurance deserts often refer to property coverage, such as homeowers insurance, but other types of insurance deserts exist as well. Below are a few types of insurance deserts across the country:

Home Insurance Deserts

Home insurance deserts are typically the result of natural disasters and climate change, which make it riskier to insure homes in areas more likely to face catastrophic events such as hurricanes, wildfires or tornadoes. While extreme cases were more limited in the past, nearly half of all homes in the U.S. are now at risk for some form of extreme damage from natural disasters and other environmental issues, leading property and casualty insurance companies to reconsider offering policies in some areas.^[5]

Rising home repair costs from materials, labor and supply chain disruptions further increase the cost of claims.^[6] To combat this, many insurers raise premiums to offset the risk. However, other insurers have either reduced coverage or stopped writing new policies entirely — as seen with multiple major insurance companies in the California market recently.^[7]

This leaves many homeowners, whether seeking a new policy or facing cancellation, with limited access to affordable coverage.

Health Insurance Deserts

Health insurance deserts are areas where options for health insurance providers are limited or nonexistent. Rural regions with smaller populations may have fewer insurers available, often resulting in higher premiums.^[8] When these areas are also low-income, or employers do not offer health benefits, residents may struggle to find affordable health insurance options.^[9]

In many states that have not expanded Medicaid, low-income communities may be left with little to no access to affordable health insurance, creating health insurance deserts.^[3]

Other Types of Deserts

Health care deserts are areas where residents lack access to essential health care services such as physicians, specialists, hospitals and clinics. More than 9% of counties in the U.S. lack sufficient primary care providers to meet population needs, resulting in longer wait times for check-ups and appointments. This can overwhelm local emergency rooms when residents cannot access preventive care, further reducing health care access for those in need of immediate treatment.^[10]

Hospital deserts, which account for more than 20% of U.S. counties, are areas where it takes more than 30 minutes to reach the nearest facility. A lack of accessible hospitals can make receiving urgent care difficult or impossible, often leading to poorer health outcomes for residents.^[10]

Auto insurance deserts can occur in high-risk areas where coverage is limited or unaffordable. Regions with high rates of vehicle theft or frequent accidents may only have expensive, high-risk policies available, making it costly for drivers to meet minimum auto insurance requirements.

Who Is Most Affected by Insurance Deserts?

Insurance deserts most often affect low-income residents, particularly in rural areas. Without the income to afford higher-priced policies that remain in the market, those who do not qualify for federal assistance may have no insurance options, depending on the type of insurance desert they’re in. A lack of financial resources can also make it difficult to relocate, leaving residents unable to move to areas with better coverage and support.

How Do I Know if I'm in an Insurance Desert?

Signs of an insurance desert include significant increases in premiums combined with fewer available options. News reports about insurers leaving your area or halting new policies may also indicate your community is transitioning into an insurance desert or has already become one.

Because insurance deserts vary by location, shopping around for policies — even if you already have coverage — may reveal that your options are becoming more limited. Regularly comparing quotes can help you understand your local insurance landscape.

What Can I Do if I'm Living in an Insurance Desert?

Options may be limited if you live in an insurance desert, but there are steps you can take. Government programs may help with affordable health insurance or provide “last resort” property coverage in high-risk areas.

You can also reduce potential losses and repair costs by taking preventative measures, such as investing in fire- or wind-resistant materials when upgrading your home.

As a last option, some residents may consider relocating to areas with more insurance choices and lower disaster risk.

Options for People Living in Insurance Deserts

Several programs can help residents of insurance deserts where policies may be unaffordable or difficult to obtain. The specific programs vary depending on the type of desert. Below are some options for those in home insurance and health insurance deserts.

Home Insurance Deserts

Here are some options for those living in home insurance deserts:

Parametric Insurance

Parametric insurance functions by only paying policyholders when specific conditions are met, such as reaching a predetermined level of rainfall, wind speed threshold or magnitude of earthquake. Rather than paying out claims based on the actual damage sustained, these policies only pay out based on the severity of a given event.^[11] While this means you may not get equivalent coverage to the damage sustained during a natural disaster, these policies may be more readily available in high-risk areas.

High-Risk Home Insurance

High-risk homeowners insurance is typically offered by non-standard insurance providers that specialize in covering properties with higher risk profiles. These policies may provide more limited coverage than a standard homeowners policy — for example, excluding wind and hail coverage in regions that experience them more frequently, such as the Texas Gulf Coast.^[12]

High-risk policies often include a percentage-based deductible for hurricane-related claims, usually between 1% and 5% of a home’s insured value.^[13]

Fair Access to Insurance Requirements (FAIR) Plans

Currently available in 26 states and Washington, D.C., FAIR plans are state-managed property insurance programs that serve as a “last resort” for homeowners who cannot obtain coverage due to living in high-risk areas. FAIR plans are generally more limited than standard home insurance, often focusing only on specific risks relevant to the region.

For example, the California FAIR Plan covers damage caused by brush and wildfires, while the New York and Georgia FAIR Plans provide coverage for wind and hail damage.^[14]

National Flood Insurance Program (NFIP)

The NFIP offers flood insurance to participating communities, since flood coverage is typically not included in standard homeowners policies. While not available everywhere, NFIP policies can offer up to $250,000 in dwelling coverage and $100,000 in personal property coverage.^[15]

Health Insurance Deserts

Here are some options for residents living in health insurance deserts:

Medicaid

Medicaid is a government-funded program that helps low-income and vulnerable populations — including pregnant people, seniors and individuals with disabilities — cover health care costs, often at little to no expense.^[16] State governments administer Medicaid programs with federal support, so eligibility requirements vary by state. In most of the U.S., individuals at or below 138% of the federal poverty level may qualify.^[17]

Those who qualify for Medicaid should review eligibility requirements regularly, since changes in income or employment rules at either the state or federal level can affect eligibility with little notice.

Children's Health Insurance Program (CHIP)

The Children’s Health Insurance Program (CHIP) provides low-cost or free health care to children 18 and younger in low-income families that do not meet the income requirements for Medicaid. Depending on the state, children may qualify with a household income between 170% and 400% of the federal poverty level.^[18]

ACA Marketplace

Purchasing health insurance through the ACA marketplace can be an option for people living in health insurance deserts, offering access to available plans. The federal government facilitates these plans, though some states operate their own marketplaces.

Even if options are limited — particularly in rural areas — applicants may qualify for government subsidies to lower their premiums, making coverage more affordable than buying directly from a private insurer. As of 2025, 92% of ACA Marketplace enrollees received some level of a premium subsidy.^[19]