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By Suzanne Blake
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Homeowners could see an extra $100 stacked onto their insurance bills over the next year as a result of President Donald Trump's newly imposed tariffs, according to a new report from Insurify.
The tariffs, which heavily impact Canadian lumber and Mexican lime and gypsum products, could push the projected national average insurance cost to $3,626 by the end of the year. That is a $106 increase year over year.
Why It Matters
The tariffs are designed to shield U.S. manufacturers from foreign competition, but they have also contributed to increased prices for raw materials and finished goods.
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President Donald Trump, in a recent interview, dismissed concerns about the rising costs associated with the tariffs, calling the price increases "peanuts" compared to the potential economic gains.
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What To Know
Trump's tariff policies have been a cornerstone of his economic strategy, aiming to protect American industries while raising government revenue. The decision to implement tariffs was framed as a response to what Trump described as "unfair trade practices" by key trading partners, particularly China.
Following the initial tariffs, the scope expanded to cover a broader range of imports from Mexico, Canada, and the European Union.
Products now subject to tariffs include raw materials like aluminum and steel, as well as consumer goods such as electronics, appliances, clothing, and vehicle parts. China, Mexico, and the European Union face some of the steepest levies. Altogether, Trump imposed tariffs on Chinese imports totaling 145 percent. That's alongside a 10 percent baseline tariff on goods from the majority of other countries.
Experts warn that the increased cost of goods could have a ripple effect on sectors beyond retail, including insurance.
According to Insurify, the rise in prices for building materials and household items could drive up home insurance premiums, as insurers adjust to the increased cost of replacing or repairing damaged property.
Home insurance costs are likely to rise 38 percent faster by the end of 2025, Insurify's report found.
Already, 60 percent of builders said their suppliers increased or announced tariff-driven increases on material prices. Since the U.S. imports 7 percent of goods for new residential construction and 46 percent of those imports come from China, Canada and Mexico, the housing market could be seriously impacted, experts say.
What People Are Saying
Drew Powers, the founder of Illinois-based Powers Financial Group, told Newsweek: "It is a simple progression: If the increase in tariffs hold, then homebuilding materials we import will cost more. If materials cost more, then repairs cost more. If repairs cost more, insurance companies pay more per claim. If claims cost more, the offsetting premiums charged to homeowners cost more. It really is that simple."
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "Even if these imports represent a small portion of the overall supply, significant tariffs can sharply increase costs. As a result, insurers are raising premiums to account for the higher replacement values of homes."
What Happens Next
The cost to rebuild a home has risen dramatically in recent years, Thompson said, and these prices are likely to surge even more under Trump's tariffs.
"Long term, this dynamic can make homeownership less affordable, potentially sidelining buyers and keeping sellers locked in their current homes," Thompson said. "As a result, the market could remain sluggish, trapped between high prices and elevated interest rates, limiting overall mobility."
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