MW Tariffs could push up homeowners insurance premiums - and people in these states would see the biggest price hikes

By Aarthi Swaminathan

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

From home builders to homeowners, every corner of the housing market is likely to feel the pinch of tariffs.

The Trump administration's worldwide tariffs on imported goods could cost American homeowners an additional $106 in home-insurance premiums this year, according to a new forecast by insurance-comparison startup Insurify.

Tariffs push up input costs. If fully implemented, the administration's import duties are likely to increase the cost of building materials, which would in turn drive up insurance rates across the U.S.

About 7% of construction materials used in building homes are imported from overseas, according to analysis by the National Association of Home Builders, a trade group. Builders already expect the tariffs to add nearly $11,000 in additional costs per home.

Read more: Builders expect tariffs to increase costs by nearly $11,000, but they're slashing home prices. Here's why.

When materials cost more, the overall expense of repairing damage caused to a property also increases. Insurance companies will have to pay out more to their policyholders; they are also expected to pass on those costs to their customers in the form of higher premiums, according to the Insurance Information Institute, an industry group.

Home-insurance costs have been rising in recent years, regardless of tariffs. Without tariffs, the average homeowner's insurance premium was expected to increase to $3,520 by the end of 2025, up from $3,259 in 2024, according to Insurify.

If Trump's tariffs are fully implemented, home-insurance premiums are expected to go up by an additional $106, the company said, to a total average of $3,626 in 2025.

The highest increases, based on existing projections for each state, would be felt by homeowners in Florida. People who own property in the state could see an additional increase in premiums of up to $464 due to the tariffs, Insurify said. Similarly, Louisiana homeowners could see an increase of $418 in homeowners insurance premiums because of the tariffs, which is also on the higher end.

The lowest increase in premiums would be felt by homeowners in Vermont. The state was already the lowest in terms of average homeowners insurance costs and would see a lower tariff-induced increase of $37, Insurify said.

Insurance premiums affect homeowners, of course, but prospective home buyers should also keep an eye on insurance costs as they hunt for a house.

Personal-finance experts advise that home buyers factor in insurance and other so-called phantom costs when they're budgeting for a property purchase. Phantom costs include property taxes, utilities and maintenance costs; many of these ongoing costs of homeownership have been rising in recent years.

Read more: Lower mortgage rates may tempt home buyers. But these fast-rising 'phantom costs' could sneak up on them.

House hunters are also seeing the impact of tariffs in the form of volatile mortgage rates. Rates are bouncing around as the financial markets try to assess the state of the U.S. economy, the possibility of a recession and whether the Federal Reserve will ease monetary policy. The 30-year fixed-rate mortgage rose 11 basis points on Monday to 6.98%, according to Mortgage News Daily. The jump higher came right on the heels of the 30-year rate falling 21 basis points between April 14 and April 16.

To be sure, it's not just tariffs that could drive up homeowners insurance premiums overall, Holden Lewis, home and mortgage expert at personal-finance site NerdWallet, told MarketWatch.

"Higher tariffs and duties might exert a small increase in prices for lumber and appliances ... [and] these higher costs might drive home-insurance premiums a bit higher," Lewis said.

But "the bulk of the rise in insurance premiums comes from the effect of fiercer storms driven by climate change," he added.

Homeowners who live in areas exposed to climate risks pay higher premiums than those in lower-risk areas, a Treasury Department study released earlier this year found.

-Aarthi Swaminathan

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April 22, 2025 17:00 ET (21:00 GMT)

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