The increasing instances of natural disasters force the households to seek the state based insurers, as the private companies avoid the risky areas by increasing the premiums and offering minimal cover.

With disasters coming more often, Americans moving to areas prone to natural disasters have to acquire home insurance to protect from damage. According to a Senate Budget Committee inquiry, private insurance non-renewals in more than 200 counties have tripled between 2018 and 2023. Now, most homeowners have no option but to rely on "insurers of last resort" for property damage.

Likewise, in California, Florida, and Louisiana, states where the number of policies with state-backed insurance plans has increased more than twofold, these plans, though safety nets for homeowners, are oftentimes more costly and cover less. Private insurers are withdrawing as risks of disaster are on the rise and many homeowners now turn to unconventional insurers that may not prove to cover them as they would wish.

Florida and California are enacting laws to stabilize and screen rising premiums in the private insurance market, but the future of home insurance remains uncertain due to the accelerating effects of climate change.