Tariffs may raise home insurance rates

President Donald Trump's proposed tariffs could cause homeowners insurance premiums in Texas to rise even faster this year than they otherwise would have, a new study finds.

Even without tariffs, average premiums in Texas will rise by about $500 this year, according to projections from Insurify, an insurance comparison shopping website. But tariffs on imports such as Canadian lumber and Mexican lime -- used in concrete -- would push that to $713 a year, Insurify projects, bringing the average annual cost of homeowners insurance in Texas to $6,718 by the end of 2025 -- an increase of 12% over last year.

Texas homeowners already pay some of the highest home insurance rates in the nation, especially in regions such as Houston and coastal Texas. Average homeowners and auto insurance rates have seen double-digit increases in recent years, according to data from the Texas Department of Insurance, due largely to costly natural disasters as well as overall inflation.

"In the last five years, 68 billion-dollar disasters have impacted Texas, the most of any state, causing about $108 billion in damages," Chase Gardner, data insights manager for Insurify, wrote in an email. "Texas is one of the most at-risk states for hurricanes, coastal flooding, drought, hail, lightning, tornadoes, wildfires, ice storms, strong winds, heat waves, and cold waves.

"All of these severe weather events increase risk for insurers," he added. "The substantial climate related losses Texas home insurers face force them to pass more risk onto homeowners in the form of higher premiums."

If Trump's tariffs take effect and remain in effect, Gardner explained, claims will become even costlier, which will translate into higher premiums.

"Tariffs will fuel rate increases even more, because tariffs increase the cost of home repairs," Gardner wrote. "Since rates are based largely on the cost to rebuild or repair a home, the added costs of tariffs will have to be passed on to the consumer through higher premiums."

Over the past month, Trump has gone back and forth on his tariff proposals. Even so, the Insurify report noted, Trump's tariffs are already having an impact nationwide. In an April 2025 survey from the National Association of Homebuilders, 60% of respondents reported their suppliers have already increased material prices, or announced plans to do so, as a result of Trump's tariffs. The builders estimated that the overall impact of the tariffs would raise the cost of building a home by about $11,000.