American homeowners are now paying $21 billion more per year for home insurance than they were just three years ago, and a convergence of Trump administration policies — from sweeping tariffs on building materials to the elimination of federal disaster mitigation programs — is poised to make the crisis significantly worse. According to the Consumer Federation of America’s March 2025 report titled “Overburdened,” the average homeowner’s premium jumped $648, or 24%, between 2021 and 2024, with increases hitting 95% of all U.S. ZIP codes. For a homeowner in Utah, where premiums spiked 59% over that period, that translates to hundreds of additional dollars a year for the same coverage on the same house — money that comes straight out of household budgets already stretched thin by inflation.
The insurance affordability crisis is not just a coastal problem or a wildfire problem anymore. It is a nationwide squeeze driven by escalating catastrophe losses, insurer market exits, and now a set of federal policy choices that are actively inflating the cost of rebuilding homes. One-third of all ZIP codes experienced premium increases above 30%, and states not traditionally associated with insurance turmoil — Illinois, Arizona, Pennsylvania — are among the hardest hit. This article breaks down how tariffs on steel, aluminum, copper, and lumber are adding thousands to construction costs, why the elimination of FEMA’s BRIC program removes a critical tool for keeping premiums down, what the departure of major insurers from entire state markets means for ordinary policyholders, and what options remain for homeowners caught in the squeeze.
Table of Contents
- How Did Homeowners End Up Paying $21 Billion More in Insurance Costs?
- What Role Do Trump’s Tariffs Play in Driving Up Your Insurance Bill?
- How the Elimination of FEMA’s BRIC Program Removes a Key Safety Valve
- What Can Homeowners Do When Major Insurers Leave Their State?
- The Profit Paradox — Record Insurer Earnings Amid a Coverage Crisis
- Congressional Pushback and What It Means for Policy
- Where Home Insurance Costs Are Headed Through 2027
- Conclusion
- Frequently Asked Questions
How Did Homeowners End Up Paying $21 Billion More in Insurance Costs?
The $21 billion figure comes from the Consumer Federation of America’s analysis of premium data across the country, and it only counts homeowners. When renters, condo owners, and manufactured home residents are included, the total increase balloons to $27 billion. These are not abstract numbers. They represent the cumulative burden of a three-year trend in which insurers have raised rates aggressively to keep pace with escalating claims costs driven by severe weather, rising material prices, and labor shortages in the construction trades. The geographic spread of the increases tells a story that defies the old assumptions about insurance risk.
Utah led all states with a 59% premium increase, followed by Illinois at 50%, Arizona at 48%, and Pennsylvania at 44%. These are not states that dominate hurricane or wildfire headlines, but they are states where severe convective storms — hail, tornadoes, straight-line winds — have become more frequent and more destructive. The insurance industry has responded by repricing risk across entire regions rather than targeting only the highest-risk properties. What makes this moment different from previous cycles of premium increases is the policy environment layered on top of the natural catastrophe trend. Repair and rebuilding expenses have jumped nearly 30% over the past five years, and instead of policies aimed at reducing those costs, the current administration has implemented tariffs and cut programs in ways that push them higher. The result is a feedback loop: disasters cost more to recover from, insurers raise premiums to cover those costs, and federal policy makes recovery even more expensive.
What Role Do Trump’s Tariffs Play in Driving Up Your Insurance Bill?
The connection between trade policy and your insurance premium is more direct than most people realize. When the cost of rebuilding a damaged home goes up, insurers must charge more to cover the expected payout. The trump administration’s tariff regime — including 50% tariffs on steel and aluminum reintroduced as of June 2025 and a 50% tariff on copper, which is essential for wiring, plumbing, and HVAC systems — has meaningfully increased the price of the materials that go into every home repair and reconstruction project. Lumber tariffs on Canadian imports compound the problem further. The National Association of Home Builders estimates that these tariffs have added between $7,500 and $10,900 to the average cost of building a new home.
Insurance industry analysts estimate the tariff impact translates to over $100 per year in additional insurance costs for the average homeowner. That may sound modest in isolation, but it stacks on top of the 24% increase already baked into premiums and arrives at a moment when many households have no room to absorb further cost increases. However, it is important to note a limitation in these projections: the $100-per-year estimate reflects average national impact, and the actual effect on any individual homeowner depends heavily on where they live, what their home is made of, and how exposed their region is to catastrophe claims. A homeowner in a low-risk area with a brick house may see a smaller impact than someone in a tornado-prone region with a wood-frame home. The tariffs also have an indirect cost that is harder to quantify — the Center for American Progress estimates they will result in 450,000 fewer new homes built through 2030, tightening housing supply and keeping property values (and therefore insured values) elevated.
How the Elimination of FEMA’s BRIC Program Removes a Key Safety Valve
One of the less-discussed but potentially more damaging policy decisions is the Trump administration’s elimination of the Building Resilient Infrastructure and Communities program, known as BRIC. Funded through FEMA, BRIC provided grants for hazard mitigation projects — things like elevating flood-prone homes, hardening roofs against hurricane winds, installing community storm shelters, and upgrading drainage infrastructure. These were precisely the kinds of investments that directly reduced insurance losses by preventing damage before it happened. The logic of mitigation funding is straightforward and well-documented: every dollar spent on hazard mitigation saves an estimated six dollars in future disaster costs.
Communities that used BRIC grants to upgrade building codes, retrofit structures, or improve stormwater systems saw measurable reductions in insurance claims after subsequent storms. Eliminating the program does not just remove future mitigation potential — it signals to the insurance industry that the federal government is stepping back from loss reduction, which gives insurers further justification for raising premiums. For homeowners in states like Florida, Louisiana, and Texas, where BRIC-funded projects were most active, the loss of the program is particularly acute. These are states already experiencing some of the highest premiums in the country, and the removal of mitigation funding means that the trajectory of premium increases has fewer brakes on it. Senator Elizabeth Warren highlighted this dynamic in a Senate Banking Committee hearing, noting that the administration’s cuts to disaster relief are compounding the insurance crisis rather than alleviating it.
What Can Homeowners Do When Major Insurers Leave Their State?
The market exit of major insurers from high-risk states has left millions of homeowners scrambling for coverage. State Farm stopped writing new home policies in California in 2023 and subsequently non-renewed 30,000 homeowners and 42,000 commercial apartment policies by March 2024. Allstate stopped selling new home policies in California, Connecticut, and Florida. When the two largest home insurers in the country pull back from entire states, the remaining options for consumers narrow sharply — and the prices on those remaining options go up. The fallback in most states is the insurer of last resort — state-run FAIR Plans or similar programs designed to provide basic coverage when the private market will not.
California’s FAIR Plan saw its policies more than double from roughly 235,000 in 2018 to over 450,000 by 2024. But FAIR Plan coverage is typically more expensive than standard private insurance, offers fewer protections, and often covers only the dwelling itself rather than personal property or liability. Homeowners who end up on FAIR Plans are paying more for less, which is the opposite of what a functioning insurance market should deliver. The tradeoff homeowners face is stark: accept a FAIR Plan with limited coverage and high premiums, or shop aggressively among smaller regional insurers who may still write policies but often charge a premium for the risk the larger companies have abandoned. Some homeowners are increasing deductibles dramatically — from $1,000 to $5,000 or even $10,000 — to keep premiums manageable, but that means absorbing far more out of pocket when a claim occurs. Others are reducing coverage limits below replacement cost, which is a gamble that could leave them financially devastated after a major loss.
The Profit Paradox — Record Insurer Earnings Amid a Coverage Crisis
One of the most galling aspects of the current crisis is the financial performance of the companies driving it. Despite pulling out of markets and non-renewing tens of thousands of policies, State Farm reported $12.9 billion in profit and Allstate reported $10.2 billion in profit in 2025. These are not companies on the brink of insolvency making painful decisions to survive. They are enormously profitable enterprises making strategic choices about where and how to deploy capital. This matters because the industry’s standard narrative — that premium increases are a necessary response to unsustainable losses — rings hollow when the same companies reporting those losses are simultaneously posting record or near-record profits.
The disconnect raises serious questions about whether the premium increases of the past three years have been proportionate to actual risk, or whether they reflect an industry that has used the catastrophe narrative to reprice products well beyond what the underlying loss data justifies. State insurance regulators, who must approve rate increases in most states, are facing increasing pressure to scrutinize insurer filings more aggressively. The warning for consumers is this: do not assume that premium increases are inevitable or non-negotiable. Insurers are required to justify their rate filings with actuarial data, and in several states, regulators have pushed back on requested increases, forcing companies to accept smaller hikes. Homeowners who engage with the regulatory process — by filing comments on proposed rate increases or contacting their state insurance commissioner — have more leverage than they typically realize.
Congressional Pushback and What It Means for Policy
The insurance affordability crisis has begun to generate meaningful congressional attention. Senator Elizabeth Warren used a Senate Banking Committee hearing to directly connect Trump’s tariffs and disaster relief cuts to rising premiums, stating that tariffs make “just about everything needed to rebuild and repair houses more expensive: aluminum, HVAC systems, appliances, gypsum.” Separately, 19 Senators led by Warren, Merkley, and Blunt Rochester sent a letter pressing the administration on how tariffs are raising housing prices across the board. Whether this pressure translates into policy changes remains to be seen.
Congressional hearings and letters create a public record and generate media attention, but they do not compel executive action. The administration has shown no indication that it intends to exempt building materials from tariffs or restore BRIC funding. For now, the congressional response serves primarily as a documentation effort — building the evidentiary case that these policy choices have measurable costs for ordinary Americans.
Where Home Insurance Costs Are Headed Through 2027
The outlook is not encouraging. Industry projections indicate premiums will rise another 8% in both 2026 and 2027, layered on top of the 24% increase already absorbed since 2021. Severe convective storms caused over $61 billion in damage in 2025 alone — the third consecutive year above $50 billion — and there is no scientific basis for expecting that trend to reverse. With 18 billion-dollar weather events in 2025, the catastrophe landscape that drives insurance pricing is intensifying, not stabilizing.
The compounding effect of these increases is what makes the situation so difficult for household budgets. A homeowner who was paying $2,700 per year in 2021 is now paying roughly $3,350 and will likely be paying over $3,900 by 2027 if projections hold. That is an increase of more than $1,200 a year — real money that displaces spending on maintenance, savings, or other household needs. Until federal policy shifts toward reducing rebuilding costs and reinvesting in mitigation, the trajectory is clear: homeowners will continue to bear the full weight of a crisis that is partly natural and partly manufactured by policy choices.
Conclusion
The $21 billion increase in homeowners insurance costs between 2021 and 2024 is a crisis with multiple drivers, but the Trump administration’s tariff regime and elimination of FEMA’s BRIC program are actively making it worse rather than better. Steel, aluminum, copper, and lumber tariffs are adding thousands of dollars to home construction and repair costs, which flows directly into higher premiums. The departure of major insurers from entire state markets is pushing hundreds of thousands of homeowners onto inferior last-resort plans.
And all of this is happening while the insurers themselves post billions in profits — a contradiction that demands greater regulatory scrutiny. For homeowners, the actionable steps are limited but real: shop coverage aggressively every renewal cycle, engage with state insurance regulators on proposed rate increases, invest in mitigation improvements that qualify for premium discounts, and pay attention to the federal policy decisions that are quietly reshaping the cost of owning a home. The insurance affordability crisis is not an act of nature alone — it is, in significant part, an act of policy, and policies can be changed.
Frequently Asked Questions
Why are home insurance premiums rising even in states without hurricanes or wildfires?
Severe convective storms — hail, tornadoes, and straight-line winds — are driving massive losses nationwide. States like Utah (+59%), Illinois (+50%), and Arizona (+48%) have seen some of the steepest increases. Insurers are repricing risk across entire regions, not just traditional coastal or wildfire zones.
How much are Trump’s tariffs adding to my insurance costs?
Insurance industry analysts estimate the tariffs will add over $100 per year to the average homeowner’s insurance costs. The tariffs on steel (50%), aluminum (50%), and copper (50%) increase the cost of nearly every material used in home construction and repair.
What is the FAIR Plan and should I rely on it?
FAIR Plans are state-run insurers of last resort that provide basic coverage when private insurers will not. California’s FAIR Plan more than doubled its policy count to over 450,000 by 2024. However, FAIR Plans typically cost more, cover less, and may not include personal property or liability protection. They should be treated as a temporary backstop, not a long-term solution.
If insurers are so profitable, why are they raising premiums?
State Farm reported $12.9 billion in profit and Allstate $10.2 billion in 2025, even as they pulled out of multiple state markets. While insurers cite rising catastrophe losses and rebuilding costs, the simultaneous record profits suggest that rate increases may exceed what the underlying risk data warrants. State regulators have the authority to challenge rate filings.
What happened to FEMA’s BRIC program?
The Trump administration eliminated the Building Resilient Infrastructure and Communities (BRIC) program, which funded hazard mitigation projects like roof hardening, home elevation, and stormwater infrastructure. These projects directly reduced insurance claims and premiums. The program’s elimination removes a key tool for holding costs down.
How much more will premiums increase in the coming years?
Industry projections forecast an additional 8% increase in both 2026 and 2027. Combined with the 24% increase from 2021 to 2024, a homeowner paying $2,700 in 2021 could be paying over $3,900 by 2027.