Abstract: Based on the panel data of 31 provinces in China from 2010 to 2020, this paper constructs a spatial econometric model and a system GMM model to empirically analyze the impact of agricultural insurance on farmers’ income. The results show that agricultural insurance has a positive impact on farmers’ income when spatial factors are not considered. Considering spatial factors, agricultural insurance has significant spatial dependence, and there is a positive spillover effect, but the intensity is weak. The empirical results show that the impact of agricultural insurance on farmers’ income in different regions is different, and the impact on farmers’ income in the eastern region is higher. It is recommended to formulate agricultural insurance policies that are tailored to local conditions, strengthen interregional cooperation, and promote the coordinated development of agricultural insurance.