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By Giulia Carbonaro
Senior Reporter
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Tariffs imposed by the Trump administration on some of the biggest U.S. trading partners could cause property insurance premiums to rise 38 percent faster than previously expected, according to a new report by Insurify.
This is linked to a projected increase in the cost of homebuilding resulting from the increase in import taxes.
Why It Matters
Key imports including softwood lumber, gypsum, appliances, and furniture are expected to be heavily impacted by the tariffs, driving up costs for homebuilding, repair, and maintenance work. The cost of rebuilding a home is crucial to the property insurance industry and forms parts of the basis on which to establish rates.
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Expected cost increases would put additional pressure on the industry, which is already struggling to factor in the growing risk posed by more frequent and more severe extreme weather events. While premiums may not climb immediately as a result of President Donald Trump's tariffs, Insurify experts said, homeowners are likely to start seeing tariff-related rate hikes by the end of the year, when their policy renews.
What To Know
Before Trump announced sweeping tariffs against goods coming from some of the U.S. biggest trading partners, Insurify expected property insurance to rise across the country by 8 percent year-over-year to an average $3,520 by year's end.
Now, it estimates an increase of 11 percent by the end of 2025. According to the company, the projected national average premium will rise to $3,626 in the coming months, $106 more than it would have without tariffs.
That is because tariffs on imported building materials are expected to significantly increase the cost of homebuilding, which directly impacts property insurance rates. If the cost of rebuilding a home after a natural disaster rises, carriers would factor that in their premiums.
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Homebuilding is already getting more expensive, according to the latest data from the National Association of Home Builders (NAHB), which found in a recent survey that builders expect a cost increase of $10,900 per home due to tariffs.
The U.S. imports about 7 percent of goods used in new residential construction, and nearly half those imports (46 percent) come from China, Canada, and Mexico. With tariffs, the cost of these materials is expected to increase, and the country is likely to face temporary shortages as the supply chain is disrupted and the U.S. tries to ramp up domestic production.
Florida, where homeowners currently pay the highest premiums in the country, is expected to see the highest projected increase due to tariffs, at $15,924 by the end of the year—a $464 increase. Insurify estimates that premiums in the Sunshine State will rise by an additional 12 percent because of tariffs.
Louisiana, which has also been struggling with the growing threat of devastating natural disasters, is expected to see its premiums increase by $418 to reach $14,355 throughout 2025, facing a 30 percent rise because of Trump's tariffs.
Oklahoma followed with a projected increase of $251 (+14 percent with tariffs), reaching $8,620 by the end of the year. Colorado was estimated to face the fourth-highest increase, at $199 (+14 percent with tariffs), reaching $6,829.
Texas followed with a projected premium increase of $196 (+12 percent with tariffs), for a total of $6,718.
What People Are Saying
David Marlett, a professor of insurance at Appalachian State University, told Insurify: "If the tariffs become entrenched, then their added costs will have to be passed on to the consumer through higher premiums."
Mark Friedlander, director of media communications at triple-A, told Insurify: "Tariffs will have the greatest impacts on the costs of auto insurance and home insurance. We anticipate the impacts will be greater than we saw during the first two years of the pandemic."
What Happens Next
Homeowners are expected to face these projected premium increases only once they renew their policies, likely toward the end of the year.
"Insurers typically must obtain regulatory approval for the rate increases, and that process takes months and even years," Marlett told Insurify. "Given the existing upward pressure on home insurance premiums, regulators will likely resist approving the increases based on a potentially temporary political action."
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