Trump Tariffs Could Cause Property Insurance Premiums to Rise 38% Faster
Tariffs imposed by the Trump administration on some of the biggest U.S. trading partners could cause property insurance premiums to rise 38% faster than previously expected, according to a new report by Insurify. This increase is linked to a projected rise in the cost of homebuilding resulting from higher import taxes.
Key imports such as 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 as it forms part of the basis for establishing rates. Expected cost increases would put additional pressure on an industry already struggling to factor in the growing risk posed by more frequent and severe extreme weather events.
While premiums may not climb immediately as a result of President Donald Trump’s tariffs, homeowners are likely to start seeing tariff-related rate hikes by the end of the year when their policies renew. Before Trump announced sweeping tariffs against goods from some of the U.S.’s biggest trading partners, Insurify expected property insurance to rise across the country by 8% year-over-year to an average of $3,520 by year’s end. Now, it estimates an increase of 11% by the end of 2025.
The projected national average premium will rise to $3,626 in the coming months, $106 more than it would have without tariffs. This increase is because tariffs on imported building materials are expected to significantly raise the cost of homebuilding, directly impacting property insurance rates. If the cost of rebuilding a home after a natural disaster rises, carriers would factor this into their premiums.
Homebuilding is already becoming 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% of goods used in new residential construction, with nearly half of those imports (46%) coming 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 Florida will rise by an additional 12% 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% rise because of Trump’s tariffs.
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.”
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.”
