U.S. President Donald Trump’s new tariffs on building materials—wood, metals, plastics, glass—are already raising construction costs. That may soon hit homeowners in the form of higher insurance premiums. The impact:
60% of builders surveyed by The National Association of Homebuilders say suppliers have already raised prices.
The average new home could cost $10,900 more.
Insurify estimates home insurance premiums may rise 11% by end of 2025—3 points higher than without tariffs.
Why It Matters:
Home insurance is already more expensive thanks to COVID-era supply chain issues, more frequent natural disasters, and higher home repair and rebuild costs. Add tariffs, and insurers are poised to raise rates faster.
How Tariffs Could Affect Insurance Premiums
Tariffs raise prices on materials, which make it costlier to repair or replace a home, which drive up insurance prices.
“Tariffs on imported building materials will increase the cost of rebuilding a home, which will raise home insurance premiums,” said Insurify’s Matt Brannon.
“Say a homeowner undergoes a home renovation with new materials ... their insurance premiums rise because the home is now more expensive to replace. That’s normal and expected, regardless of tariffs. But with tariffs, home replacement and rebuild costs could rise without the homeowner making any changes to their home.”
The situation could be worse for homeowners in high-risk areas, said Daniel Roberts, CEO of Lava Roofing in Atlanta. “Residents in areas that frequently face storms, floods, or wildfires are already paying higher insurance premiums, and tariffs might make it worse. When rebuilding after natural disasters, the increased cost of materials like lumber and steel can further drive up the expense of repairs, which could lead to even higher premiums in these high-risk areas.”
Home Insurance Costs Already Hampering Homeowners’ Dreams
Americans already feel the hit of insurance.
48% of Americans agree that "home insurance costs and/or availability may impact my ability to keep or buy a home,” per the latest BMO Real Financial Progress Index report.
This is a five-point increase from 2024.
62% of Gen Z respondents say that insurance costs or availability will prevent them from buying or maintaining a home.
57% of Millennials say the same.
27% of non-homeowners in the US report that additional costs to owning a home such as insurance or taxes are a barrier to home ownership
Are Insurance Companies Passing Tariffs Costs to Homeowners?
Yes—directly or indirectly.
"Some insurers have already exited states impacted by natural disasters", said Fran Majidi, an insurance expert at SmartFinancial in Los Angeles. “It’s hard to believe that they are able or willing to absorb the extra costs brought on by tariffs,” she said. “For this reason, experts project that premiums will increase by $106 a year on average.”
In the meantime, homeowners and home shoppers should prepare for a potential increase to their premiums. Learn more about saving on home insurance costs here on NewHomeSource.com/learn, and follow NewHomeSource on Instagram.
