Tariffs Could Push Up Homeowners Insurance Premiums — And People in These States Would See the Biggest Price Hikes

Tariffs Could Push Up Homeowners Insurance Premiums — And People in These States Would See the Biggest Price Hikes

Tariffs on construction materials could push the average homeowner’s annual insurance premium up to $3,626 by the end of the year, Insurify projects.

By Steven Orlowski, CFP, CNPR - Orlowski, Financial Counsel, LLC

Homeowners across the United States may soon feel the sting of rising costs—not from natural disasters or inflation, but from tariffs. According to recent projections by Insurify, new or increased tariffs on construction materials could drive the average annual homeowners insurance premium to $3,626 by the end of 2025.

That would mark a significant increase from the current national average of roughly $2,777, and for many policyholders, it would represent yet another strain on already-tight household budgets.

Why Tariffs Impact Insurance

Homeowners insurance premiums are closely tied to rebuilding costs. When the price of materials like lumber, steel, copper, and aluminum goes up due to tariffs or supply chain disruptions, the cost to repair or replace damaged homes rises as well. Insurers adjust their premiums to reflect these increased risks and expenses.

“Increased tariffs mean higher construction costs, which means insurers have to pay more for claims,” says a spokesperson for Insurify. “Those costs get passed along to homeowners through higher premiums.”

And it’s not just new home buyers or those filing claims who are affected. Insurance companies base their rates on replacement value—not market value—so any rise in material costs influences everyone’s premiums.

The States That Will Be Hit the Hardest

While all U.S. homeowners could see increases, some states are likely to be hit much harder than others due to a combination of weather-related risks, construction demand, and housing costs.

According to Insurify, the states expected to see the biggest premium hikes include:

1. Florida – Already facing sky-high insurance rates due to hurricane risk, Florida homeowners could see average premiums exceed $6,000.

2. Louisiana – With frequent storm damage and a fragile insurance market, residents may face average premiums near $5,400.

3. Texas – High population growth and storm-related claims could push premiums above $4,200.

4. California – Wildfires and rebuilding costs could drive average premiums beyond $4,000.

5. Oklahoma – Tornado risks and high claims frequency could raise premiums above $3,800.

Meanwhile, states with lower weather-related risks and more stable construction costs—such as Wisconsin, Idaho, and Vermont—are projected to see smaller increases, though no region is completely immune.

What Homeowners Can Do

While homeowners can't control global trade policy, they can take steps to mitigate rising insurance costs:

• Shop around: Compare quotes from multiple insurers to find the best rate.

• Bundle policies: Combining auto and home insurance can lead to significant discounts.

• Increase your deductible: Opting for a higher deductible can lower your annual premium.

• Improve home safety: Installing storm shutters, reinforcing roofs, or updating wiring can earn you discounts.

• Reassess coverage: Make sure you're not overinsured for things like personal property or loss of use.

What’s Next?

The insurance industry and homeowners alike are closely watching how potential tariff changes unfold in the coming months. If tariffs on key materials are implemented—or existing ones are increased—homeowners may want to brace for a sharp uptick in their premiums by year-end.

As the cost of living continues to rise, the intersection of geopolitics, supply chains, and climate risk is creating a new challenge for American homeowners: protecting their most valuable asset without breaking the bank.