Indigenous communities face more exposure to floods, wildfires, severe storms, extreme temperatures, and other hazards compared with non-Indigenous communities. And while federal disaster assistance programs have a critical role in helping tribes mitigate and recover from disasters, they are not designed to fully compensate households for their losses.
For that, homeowners need insurance. Home insurance is the foundation for households’ financial recovery after a disaster, providing resources to repair or rebuild damage and replace losses. When a home is destroyed, a household risks not only losing shelter, but also a financial asset. For families with fewer financial resources to rebuild, this loss can have lasting consequences for their household wealth and financial security.
Here, we explore barriers tribal communities face in obtaining affordable home insurance and how tribal-owned insurers are filling some coverage gaps.
Insurance can be difficult to access and afford in tribal communities
Tribal communities face distinct barriers to accessing affordable coverage through conventional insurance markets. Remote geography can affect underwriting because homes located far from fire departments, emergency services, or municipal water systems may receive higher risk ratings. Many tribal communities face high underlying exposure to wildfires, floods, and other hazards, which can raise premiums or lead insurers to reduce coverage.
Limited household resources compound these barriers. In our analysis of 2020–24 American Community Survey (ACS) data, the median household income in tribal counties is about $59,000, compared with about $81,000 in all US counties. In addition, research shows homeowners with lower incomes tend to pay more for insurance relative to the value of their homes. So even when coverage is available, persistent poverty in tribal communities can make insurance premiums difficult to absorb.
Housing and land-tenure arrangements in tribal communities can create additional complications. Homes on trust or allotted land may be more difficult to value, and nonstandard construction can complicate estimates of replacement costs.
In other cases, some types of housing may fall outside of standard insurers’ underwriting preferences. For example, insurers may classify structures built from clay straw or straw bales as high risk because of their increased vulnerability to fire.
On average, property insurance spending is lower in tribal counties
To better understand how many households in tribal communities are underinsured or uninsured, we analyzed the share of owner-occupied households reporting less than $100 a year in property insurance costs in 2020–24 ACS data. Without comprehensive data on insurance coverage in tribal communities, this measure serves as a proxy for whether households had comprehensive home insurance, which typically costs more than $1,200 per year.
We find that on average, about 31 percent of owner-occupied households in tribal communities report spending less than $100 annually on property insurance. That’s more than double the median for all US counties (about 14 percent).
Further, we find that tribal communities with very high scores on the Federal Emergency Management Agency’s National Risk Index also have lower insurance coverage, on average. In other words, tribal communities at the highest risk of disasters likely do not have enough insurance coverage to recover from large potential losses. This can create a compounding crisis: When communities have fewer resources to repair and rebuild after one disaster, they become more vulnerable to damage from the next, further straining the resources available for recovery.
How tribal-owned insurers are filling gaps left by conventional property insurers
To address insurance gaps, some organizations have designed insurance products and risk-reduction services tailored to conditions in tribal communities.
In 1986, conventional carriers discontinued coverage for federally assisted housing on tribal lands, and the remaining options were prohibitively expensive for Indian Housing Authorities. This led hundreds of tribes to come together to pool risk and resources and create a tribally owned insurance provider, AMERIND.
AMERIND’s approach suggests that expanding insurance protection in tribal communities could require more than increasing access to existing products. Communities could be better served by insurance products, underwriting approaches, and risk-reduction strategies tailored to tribal communities’ housing, land-tenure, infrastructure, and hazard conditions.
Building resilience in tribal communities by expanding access to insurance
These barriers are likely to compound, as the cost of homeowners’ insurance continues to rise across the US. As such, households in tribal communities will likely have fewer options for protecting their homes and fewer resources to recover when losses occur. Over time, this can have consequences beyond individual households. When insurance doesn’t provide sufficient resources for recovery, more costs may fall on tribal governments and public disaster assistance.
Expanding affordable insurance options, alongside investments that reduce disaster risk, can help communities recover more fully from disasters and strengthen resilience for future events.
This article was prepared using federal funds under award ED22HDQ3079185 from the Economic Development Administration, US Department of Commerce. The statements, findings, conclusions, and recommendations are those of the authors and do not necessarily reflect the views of the Economic Development Administration or the US Department of Commerce.
