Trump tariffs set to raise home insurance costs as construction materials affected

With US insurance premiums already outpacing those in other surveyed countries, the tariff-induced rise in construction costs is poised to widen this gap.

Canada supplies 72% of the $8.2bn in sawmill and wood products imported annually, Credit: Flystock via Shutterstock.

GlobalData surveying has found that US consumers pay more for home insurance than any country surveyed. Meanwhile, new tariffs introduced by President Donald Trump in April 2025—particularly those affecting imported construction materials—are expected to further increase rebuild costs, placing additional upward pressure on home insurance premiums.

GlobalData’s 2024 Emerging Trends Insurance Consumer Survey highlights the existing burden on US consumers: 55.8% pay over $1,000 annually for home insurance, compared to just 14.6% of UK consumers paying over £750 (approximately $986). With US premiums already outpacing those in other surveyed countries, the tariff-induced rise in construction costs is poised to widen this gap. Construction Dive reported a 1.4% spike in input prices in January 2025, before the tariffs took effect, as contractors pre-emptively stockpiled materials, marking the largest monthly increase in two years.

Proportion of respondents who spend approximately $1,000 or more on home insurance 2024

Source: GlobalData’s 2024 Emerging Trends Insurance Consumer Survey.

In April 2025, President Trump introduced a 10% baseline tariff on imports from all countries, with China hit with a further 34% of tariffs on top of the 20% announced in March 2025, taking its new total to 54%. Mexico and Canada are exempt from this round of tariffs but still face a 25% tariff on non-USMCA goods including steel and aluminum, which was announced in March 2025. The US relies heavily on Canada, Mexico, and China for key construction materials such as lumber and steel.

Canada supplies 72% of the $8.2bn in sawmill and wood products imported annually, according to the National Association of Home Builders while insurance comparison website Insurify reports that 35% of US steel imports come from Canada and Mexico. Meanwhile, the tariffs on China will be particularly impactful given it is a source of various raw materials and components. These layered costs are expected to drive up rebuild expenses, directly impacting home insurance premiums.

The new tariffs will have a significant impact on important construction materials such as steel, aluminium, lumber, and concrete. This increase in the cost of rebuilding will have a direct impact on the claim payouts that insurers will face and thus reduce their profitability. In turn, this could be passed onto policyholders through increased premiums. As well as this, rising material costs will result in higher property valuations, meaning many can be left underinsured. To support consumers during these uncertain times, insurers can offer policies that adjust to the price of materials to ensure policyholders have suitable coverage.