The daily news cycle surrounding tariffs in the U.S. can feel a bit like a soap opera with its constantly shifting plots and villains.
But one thing is certain, according to economists: Tariffs drive up prices. For this reason, many insurance-industry organizations and leaders have spoken out against President Donald Trump’s tariff agenda, particularly in light of other recent premium pressure on insurance insurance carriers.
“The growing demographic shifts and property values to high-climate-risk areas, inflation in the cost to repair and replace property, climate change, legal system abuse, delayed regulatory approval of rate filings, and mandated coverages have collectively resulted in escalating insurance losses, poor profitability, and limited capital compared to the growth in the U.S. economy and related insurance demand,” Robert Gordon, senior vice president of policy, research, and international at the American Property Casualty Insurance Association (APCIA) said during recent testimony before the Senate Committee on Banking, Housing, and Urban Affairs.
Evernest, the property management company, recently set out to uncover how much tariffs could impact new home construction prices. The firm’s research indicated that tariffs have already added about $100,000 to the cost of a new home. The slideshow above illustrates the states where new-home construction costs are forecast to rise the most, according to Evernest.
"The data shows that [tariff] policies affect real affordability, especially in places where incomes haven’t kept pace with construction costs,” an unnamed Evernest spokesperson said in a statement about their state-by-state survey of the cost of building a 2,200-square-foot home.
The more it costs to build a home, the more it will cost to insure that property.
“As home prices remain elevated at historically high levels, rising insurance premiums are also contributing to the growing costs of homeownership and property management,” writes Steve Koller, a postdoctoral fellow with the Joint Center for House Studies at Harvard University. “From the Great Recession to the present, homeowners’ insurance prices have increased 74 percent while home prices have increased more than 40 percent, even after adjusting for inflation.”
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