Tariffs Could Raise Home Insurance Costs up to 38% Faster

Homeowners were already bracing for higher home insurance costs in 2025, and tariffs on construction materials could further raise insurance rates. Insurify projects tariffs will add an extra $106 to the average homeowner’s annual insurance costs, pushing the projected national average to $3,626 around the end of the year.

Tariffs wouldn’t affect home insurance costs to the same extent as auto insurance costs, since home builders generally rely more on domestic materials. But the U.S. imported about $14 billion worth of residential construction materials in 2024, including Canadian lumber and Mexican lime and gypsum products, according to the National Association of Home Builders (NAHB).^[1]

Tariffs have raised those costs, making repairing or replacing a home more expensive and, consequently, driving up the cost of claims that insurers must cover. Insurance companies are likely to pass this risk on to homeowners by charging higher premiums.

To estimate how these costs could translate into higher home insurance premiums, Insurify data scientists projected how higher insurance coverage limits, necessitated by tariffs, would change premium pricing nationally and across the 50 states.

Key findings

• Tariffs on imported building materials have increased the cost of rebuilding a home, which will raise home insurance premiums. Tariffs could increase home insurance costs 38% faster by the end of 2025, from an 8% year-over-year cost increase to an 11% cost increase.

• With tariffs, Insurify projects the average homeowner would pay $3,626 annually for home insurance by the end of 2025 — $106 more than they would pay without tariffs and $367 more than they paid at the end of 2024 ($3,259).

• A majority of builders (60%) reported their suppliers have already increased or announced tariff-driven increases for material prices, according to an NAHB survey. Builders estimate a cost increase of $10,900 per home due to tariffs.^[2]

• 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.^[3]

Why tariffs would increase home insurance costs

Insurify data scientists expect tariffs to increase the cost of home insurance because insurance rates are based in part on the cost to rebuild a home.

“If the tariffs become entrenched, then their added costs will have to be passed on to the consumer through higher premiums,” David Marlett, who holds a doctorate in risk management and insurance and is a professor of insurance at Appalachian State University, told Insurify.

Some suppliers have already imposed or announced tariff-driven price increases. As a result, builders expect tariffs to raise the cost of construction materials for the average home by about $10,900, according to an NAHB survey released April 16.^[2]

If a homeowner used to need $400,000 worth of dwelling coverage before tariffs, they would then need at least $411,000 to cover tariff-related cost increases, raising their premium.

Homeowners would also need higher personal property coverage limits, since tariffs would raise the cost of home appliances, 34% of which are imported.^[3] Additionally, China in April suspended exports of certain rare earth minerals and materials commonly used in home appliances, which could constrain supply and drive up prices for appliances and other products.^[4] [5]

Raising dwelling and personal property coverage limits to account for new tariff-related costs would add about 3 percentage points to Insurify’s previous projection of an 8% increase, meaning costs would rise about 11% around the year’s end.

State-by-state projections: Home insurance costs with tariffs

State Projections: Tariffs and the Average Annual Cost of Home Insurance (2025)

State	Projected Annual Cost of Home Insurance With Tariffs (End of 2025)	Projected Annual Cost of Home Insurance Without Tariffs (End of 2025)
Alabama	$6,006	$5,831
Alaska	$1,589	$1,543
Arizona	$3,337	$3,240
Arkansas	$5,229	$5,077
California	$3,018	$2,930
Colorado	$6,829	$6,630
Connecticut	$2,806	$2,724
Delaware	$1,744	$1,693
Florida	$15,924	$15,460
Georgia	$3,941	$3,826
Hawaii	$1,862	$1,808
Idaho	$2,673	$2,595
Illinois	$3,504	$3,402
Indiana	$2,849	$2,766
Iowa	$3,940	$3,825
Kansas	$4,925	$4,782
Kentucky	$3,732	$3,623
Louisiana	$14,355	$13,937
Maine	$1,739	$1,688
Maryland	$2,457	$2,385
Massachusetts	$2,505	$2,432
Michigan	$3,389	$3,290
Minnesota	$4,180	$4,058
Mississippi	$5,354	$5,198
Missouri	$3,750	$3,641
Montana	$2,506	$2,433
Nebraska	$5,359	$5,203
Nevada	$1,894	$1,839
New Hampshire	$1,656	$1,608
New Jersey	$1,826	$1,773
New Mexico	$4,887	$4,745
New York	$2,941	$2,855
North Carolina	$3,535	$3,432
North Dakota	$4,049	$3,931
Ohio	$2,066	$2,006
Oklahoma	$8,620	$8,369
Oregon	$1,861	$1,807
Pennsylvania	$1,860	$1,806
Rhode Island	$2,984	$2,897
South Carolina	$4,297	$4,172
South Dakota	$4,183	$4,061
Tennessee	$3,633	$3,527
Texas	$6,718	$6,522
Utah	$2,281	$2,215
Vermont	$1,285	$1,248
Virginia	$2,346	$2,278
Washington	$2,055	$1,995
West Virginia	$1,796	$1,744
Wisconsin	$2,112	$2,050
Wyoming	$2,497	$2,424

Source: Insurify analysis of data from Quadrant Information Services and the National Association of Home Builders

Insurify previously projected the average cost of home insurance would rise to about $3,520 by year’s end. Tariffs on materials used in construction would add up to $106, leading to an estimated cost of $3,626 by the end of 2025.

Insurify applied that broad 3% cost increase to its existing projections for each state to gauge how costs could vary from one area to another. Based on its average insurance prices, Florida would see the largest increase by dollar amount due to tariffs, at roughly $464. Vermont, the state with the lowest average home insurance costs, would see a tariff-related increase of only roughly $37 added to its projected end-of-year cost.

State	Projected Annual Cost of Home Insurance With Tariffs (End of 2025)	Projected Annual Cost of Home Insurance Without Tariffs (End of 2025)	Projected Cost Increase for Home Insurance With Tariffs (End of 2025)	Projected Cost Increase for Home Insurance Without Tariffs (End of 2025)	Projected Annual Cost Increase Attributable to Tariffs
United States	$3,626	$3,520	11%	8%	$106
Alabama	$6,006	$5,831	10%	7%	$175
Alaska	$1,589	$1,543	8%	5%	$46
Arizona	$3,337	$3,240	11%	8%	$97
Arkansas	$5,229	$5,077	16%	13%	$152
California	$3,018	$2,930	24%	21%	$88
Colorado	$6,829	$6,630	14%	11%	$199
Connecticut	$2,806	$2,724	8%	5%	$82
Delaware	$1,744	$1,693	8%	5%	$51
Florida	$15,924	$15,460	12%	9%	$464
Georgia	$3,941	$3,826	11%	8%	$115
Hawaii	$1,862	$1,808	20%	17%	$54
Idaho	$2,673	$2,595	11%	8%	$78
Illinois	$3,504	$3,402	13%	10%	$102
Indiana	$2,849	$2,766	10%	7%	$83
Iowa	$3,940	$3,825	22%	19%	$115
Kansas	$4,925	$4,782	8%	5%	$143
Kentucky	$3,732	$3,623	13%	10%	$109
Louisiana	$14,355	$13,937	30%	27%	$418
Maine	$1,739	$1,688	6%	3%	$51
Maryland	$2,457	$2,385	11%	8%	$72
Massachusetts	$2,505	$2,432	5%	2%	$73
Michigan	$3,389	$3,290	11%	8%	$99
Minnesota	$4,180	$4,058	18%	15%	$122
Mississippi	$5,354	$5,198	11%	8%	$156
Missouri	$3,750	$3,641	10%	7%	$109
Montana	$2,506	$2,433	13%	10%	$73
Nebraska	$5,359	$5,203	13%	10%	$156
Nevada	$1,894	$1,839	9%	6%	$55
New Hampshire	$1,656	$1,608	6%	3%	$48
New Jersey	$1,826	$1,773	9%	6%	$53
New Mexico	$4,887	$4,745	9%	6%	$142
New York	$2,941	$2,855	8%	5%	$86
North Carolina	$3,535	$3,432	9%	6%	$103
North Dakota	$4,049	$3,931	9%	6%	$118
Ohio	$2,066	$2,006	11%	8%	$60
Oklahoma	$8,620	$8,369	11%	8%	$251
Oregon	$1,861	$1,807	15%	12%	$54
Pennsylvania	$1,860	$1,806	10%	7%	$54
Rhode Island	$2,984	$2,897	7%	4%	$87
South Carolina	$4,297	$4,172	7%	4%	$125
South Dakota	$4,183	$4,061	16%	13%	$122
Tennessee	$3,633	$3,527	12%	9%	$106
Texas	$6,718	$6,522	12%	9%	$196
Utah	$2,281	$2,215	12%	9%	$66
Vermont	$1,285	$1,248	6%	3%	$37
Virginia	$2,346	$2,278	8%	5%	$68
Washington	$2,055	$1,995	11%	8%	$60
West Virginia	$1,796	$1,744	8%	5%	$52
Wisconsin	$2,112	$2,050	11%	8%	$62
Wyoming	$2,497	$2,424	10%	7%	$73

Why tariffs could disrupt the global supply chain

Tariffs could lead to material shortages as suppliers raise prices and cut back on imports, slowing the supply chain for construction materials. The COVID-19 pandemic contributed to similar disruptions in the supply chain. Replacement costs, which are a key factor in home insurance pricing, rose 55% between 2019 and 2022, according to research from the Insurance Information Institute (Triple-I).^[6]

“Tariffs will have the greatest impacts on the costs of auto insurance and home insurance,” Mark Friedlander, director of media communications at Triple-I, told Insurify. “We anticipate the impacts will be greater than we saw during the first two years of the pandemic.”

Supply chain impacts would vary by country. Nearly half of imports (46%) used in home construction come from three countries, according to NAHB research: China, Canada, and Mexico. China provides 54% of home appliance imports, Canada provides 70% of sawmill and wood product imports, and Mexico provides 71% of lime and gypsum product imports.^[3]

With tariffs affecting lumber supply, the White House has called for a 25% increase in timber production from federal lands. The U.S. doesn’t produce enough lumber to meet domestic demands, according to NAHB researchers. It could take months to years for markets to see the benefits of increasing domestic lumber supply, given the time required to build up sawmill production, researchers said.^[7]

Tariffs would also affect furniture, which homeowners typically account for in their personal property coverage. The U.S. imported $25.5 billion in furniture in 2024, with Vietnam, China, Mexico, and Canada as the top suppliers.^[8]

What homeowners should know about tariffs and home insurance

Homeowners are unlikely to see higher premiums right away. Insurers have to gather sufficient evidence of higher costs to successfully petition state insurance officials for rate hikes.

“Insurers typically must obtain regulatory approval for the rate increases, and that process takes months and even years,” Marlett said. “Given the existing upward pressure on home insurance premiums, regulators will likely resist approving the increases based on a potentially temporary political action.”

At the earliest, policyholders could see higher rates by the end of the year. But homeowners won’t feel the burden of increased rates due to tariffs until their policy is up for renewal. This could mean many homeowners won’t experience tariff-driven rate increases until next year.

Many homeowners with a mortgage pay for home insurance through their escrow accounts. Mortgage lenders or servicers estimate home insurance rates and factor them into escrow costs. Those escrow accounts could become underfunded if insurance premiums at renewal are noticeably higher than the servicer’s initial estimate. Homeowners who pay their home insurance through their escrow account should review their renewal documents closely and talk to their mortgage lender or servicer if they have any concerns.

Homeowners can still take steps to mitigate tariff-driven cost increases. Comparing rates among different insurance companies could help some find more affordable coverage. Homeowners can talk to an insurance agent about discounts they may be eligible to receive.

Methodology

Insurify data scientists turned to their real-time database of insurance quotes from partner carriers, as well as aggregated rate filings from Quadrant Information Services, to determine the state of home insurance in 2025.

Unless otherwise stated, non-tariff rates in this report represent the average annual cost of an HO-3 insurance policy for homeowners with good credit and zero claims within the past five years, covering a single-family frame house with the following coverage limits: $400,000 dwelling, $25,000 personal property, $30,000 loss of use, $300,000 liability, and a $1,000 deductible. Actual premiums may vary based on individual circumstances, including location, home construction, insurer, and policy details.

Insurify gathered Quadrant rates, which include 10 to 15 of the largest insurers by market share in each state, in representative ZIP codes in the 10 largest urban areas in every state. Statewide costs reflect the average rate for homeowners across these ZIP codes. These ZIP codes serve as representative samples and may not capture all regional variations in pricing.

The 2025 prices reflect rates as of Jan. 1, 2025. To project how home insurance rates will change in 2025, Insurify data scientists looked at the historical relationship between a state’s prior five years of personal home insurance industry-wide loss ratios and how much its average home insurance rates changed the following year. They then projected how much rates will rise or fall in every state in 2025 based on the most up-to-date home insurance loss-ratio data.

To account for the unprecedented damages caused by the Los Angeles area wildfires in January 2025, Insurify data scientists extended California’s home insurance loss-ratio timeline to include this event. The state’s projection thus accounts for loss-ratio impacts from these fires using estimates of the total insured damages they caused.

To calculate tariff-related price increases, Insurify collected data for homes with a dwelling coverage of $411,000 to account for estimated tariff-related cost increases for home construction. Personal property coverage limits were raised by $2,250 to account for the cost of tariffs on home appliances.

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