Trump’s tariff war likely means Mississippians will see higher home insurance costs

Home insurance rates in Mississippi will rise again this year as President Donald Trump’s latest tariffs on building materials push construction costs even higher, unless rate increases can be blocked at the state level, insurance commissioner Mike Chaney warned.

“If you are on the Gulf Coast, you’re already facing a 30 percent increase in the cost of materials after a hurricane to rebuild,” Chaney, 82, said during an interview with The Mississippi Independent. “The insurance companies are now trying to add another 20 percent because of the tariffs. We had a knockdown, drag-out [fight] about it with one of the carriers this week already.”

The insurer, which Chaney declined to name, insisted on the rate hike.

“They said they would do it anyway,” added Chaney, who has been in office for 17 years, making him the longest-serving state insurance commissioner in the United States. “I told them that I’d rescind all their rate increases. It’s not okay to screw the consumers like that.”

Trump’s sweeping tariffs on foreign steel and aluminum took effect last week, while a similar tax on Canadian lumber—a crucial material for home rebuilding—was delayed until April 2, 2025, according to the National Association of Homebuilders, which had lobbied the White House for an exemption.

Tariffs and inflation drive homeowners’ costs higher

Trump’s on-again, off-again tariff policies have shaken consumer confidence, cratered the stock market, and accelerated inflation across a range of goods and services in recent weeks. While domestic manufacturers supported the metals tariff to protect against foreign competition, policy experts say the costs will ultimately fall on consumers.

“When the Trump administration imposed tariffs on various imports in 2018, the stated purpose was to boost U.S. industries and punish foreign exporters,” the Tax Foundation, a Washington D.C.-based tax policy think tank, wrote in a February 2025 report. “But rather than hurting foreign exporters, the economic evidence shows American firms and consumers were hardest hit by the Trump tariffs.”

For homeowners, these costs will likely translate into higher insurance premiums. When a home is damaged, insurers must pay market prices for rebuilding materials—prices that have already risen due to general inflation and a shrinking immigrant labor force, the latter of which some experts attribute to Trump’s expanded ICE raids and deportations.

While consumers can adjust their spending on groceries or put off buying a new car, homeowners with mortgages cannot avoid rising insurance costs. According to a 2024 Harvard study, home insurance prices have increased by 74 percent since the Great Depression of the 1930s, with most of that increase having occurred in recent years. The average nationwide rate change during the past two years has been 24 percent, according to S&P Global Market Intelligence, a New York City-based financial intelligence and analytics company.

Some homeowners have seen their insurance premiums double or triple in just a few years in states like California, Florida, Louisiana, Alabama, Mississippi and Texas. Others have had their policies dropped entirely by their insurers. In 2024, 33 states experienced double-digit rate increases, with Nebraska seeing the highest jump at 22.7 percent, followed by Montana, Iowa, Minnesota, Utah and Washington, all of which saw rates climb by more than 20 percent, according to the S&P Global report.

Mississippi saw an 11.2 percent increase in 2024, bringing the state’s five-year average increase to 24.9 percent. Individual rate hikes varied widely depending on the insurance provider. For example, Liberty Mutual raised rates 37 percent nationwide during the last two years, while Progressive hiked rates 88 percent in six years. The largest increase in 2024 came from American Family Insurance, which raised rates by 16.5 percent.

Insurance industry assets belie the perception that insurers are struggling

While insurers have reported billions in losses in recent years, their financial reserves remain vast. The property and casualty (P&C) insurance sector recorded $20 billion in losses in 2017, 2022 and 2023, with claims exceeding premiums in five of the last 10 years, according to a September 2024 U.S. Treasury report.

However, the industry still has $2.8 trillion in assets, including the highest surplus in history—the difference between liabilities and assets. The P&C sector could theoretically pay off all outstanding claims in the U.S. and still have 30 percent of its funds left over.

While tariffs and inflation contribute to rising costs, climate change is one of the biggest drivers of soaring insurance rates.

In 2023, the U.S. saw 28 extreme weather disasters, each causing at least $1 billion in damages, breaking the previous record of 20 in 2020, according to a report by the National Oceanic and Atmospheric Administration. Between 2015 and 2024, the nation experienced 190 separate billion-dollar disasters totaling $1.4 trillion in damages.

A significant number of those events happen during hurricane season, putting Gulf of Mexico and Atlantic coast communities at higher risk from stronger, more frequent and increasingly unpredictable hurricanes.

Worsening hurricanes are linked to warmer-than-average air and ocean temperatures. For millions who live along the Gulf of Mexico, the water has never been warmer. Hurricanes feed off warm ocean water, intensifying as it evaporates into warm air masses. Because warmer air holds more water, deadly flood risks from hurricanes are far greater during these warming periods.

When Hurricane Helene hit in September 2024, it dumped 40 trillion gallons of rain across the Southeast. The rainfall stunned meteorologists, and experts estimate that 1-2 percent of homeowners in high-elevation areas of South Carolina, North Carolina and Georgia did not have flood insurance. Add that to hurricane surges on the coast and the potential for homeowners to get flooded increases dramatically. Following Hurricane Katrina in 2005, residents of the Mississippi Gulf Coast frequently experienced claim denials due to insurance companies attributing storm surges with accompanying winds as “floods,” though the homes were not in flood zones and so did not have flood insurance.

Insurers like Farm Bureau have meanwhile changed homeowner policies to cover only the depreciated value of a home’s roof, rather than the full replacement cost, including in Mississippi. That means a homeowner is saddled with potentially much higher out-of-pocket expenses if they are forced to replace what is obviously an essential structural component. With the new tariffs, such out-of-pocket expenses could become insurmountable.

As insurance commissioner, Chaney licenses and regulates the practices of all insurance companies, agents, burial associations, fraternal societies, bail bondsmen, and other entities engaged in the business of insurance. He also serves as the state fire marshal. He said no one knows exactly how Trump’s tariffs will impact Mississippi’s insurance market, and observed that the rising cost of property insurance is “probably going to hurt all of us. The best thing to do is shop around for the best coverage at a price that suits you.”

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Image: Damaged home following 2023 tornado in Rolling Fork, Miss. (Creative Commons)