Spring 2025 Insurance Guide
By Michael Giusti
Just as Spring weather can prompt people to refresh their wardrobes and clean out their garages, Spring weather can also be a sign that it’s time for an insurance checklist.
Wild weather and changing living situations are common at the beginning of the season, but this spring also brings with it a new administration in Washington, complete with its own set of insurance questions.
So, from evaluating rental and auto coverage to checking in on health care needs, and even to preparing for possible effects of inflation, the spring season is an excellent time to take stock of risks and the policies available to protect against them.
The Fed Effect
One of the most common themes brought up by President Donald Trump early in his administration has been the prospect of tariffs. And while insurance policies themselves wouldn’t be subject to a tariff surcharge, if tariffs do end up driving up some costs in the economy, those effects could reverberate through the insurance industry.
Tariffs on the Canadian and Mexican auto industry in particular could have a profound influence on auto insurance prices. That is because, according to a recent analysis, Mexico supplies about 40% of auto parts to the U.S., and Canada provides another 20%. One analysis estimated that the impacts of the full tariffs, depending on how they might ultimately be applied, could add as much as $40 billion in additional costs to the auto industry, adding tens of thousands of dollars to the sticker price of many new vehicles.
This matters to auto insurers both on the sticker price side, and on the parts side. More costly vehicles mean that if they are totaled in an accident, replacing them costs more. Costlier parts and components mean that after accidents, repairs will cost more to get them back on the road.
If insurers have to pay more for replacements and for repairs, those costs will be passed along to consumers in the form of higher premiums.
The same logic holds for homeowners policies when it comes to Canadian lumber and steel imports. More costly home repairs mean insurers have to pay out more after a claim, which could lead to even higher homeowners premiums. According to the National Association of Home Builders, imports made up $14 billion worth of the components needed to build homes each year.
Costlier components translate to costlier homes.
Immigration policy could also drive up costs for homebuilders as much of their labor pool could dry up with increased immigration enforcement.
Tariffs and immigration aren’t the only places where federal policy changes could trickle down to the insurance industry. The federal budget resolution passed by the House called for cuts to the Energy and Commerce Committee to the tune of $880 billion over 10 years. According to the Congressional Budget Office, the only way to get to that number would be to make cuts to a program like Medicaid or Medicare.
If Congress pulled back on Medicaid, that could put many of the state-run Affordable Care Act exchanges at risk, as well as have implications for many rural and community heath programs.
Trump has said he does not intend to cut those programs, though, potentially leaving Washington with a question mark about what the future of these programs and budget cuts could look like.
Premium Outlook
One potential good news story in the insurance world is that after years of auto insurance premium hikes, there are signs some relief might be in sight.
According to the TransUnion Q1 2025 Insurance Personal Lines Trends and Perspectives report, many of the nation’s auto insurance carriers saw their premiums and their losses hit the healthiest balance they have seen in years.
With what the analysts are calling “rate adequacy” achieved, many of the insurers are coming to a point where they may start increasing their advertising budgets and potentially competing more aggressively for customers – potentially putting downward pressure on auto insurance premiums — presuming tariffs don’t cut into those bottom lines.
Unfortunately, the same cannot be said with the homeowners insurance market.
Industrywide, homeowners policies are still paying out too much in losses compared with the premiums they are bringing in to be considered a healthy market. And some regions are in worse shape than others.
California and other Mountain West states in particular, are suffering from years of record-breaking wildfire losses. California issued a one-year moratorium on insurers dropping homeowners who live in a fire-affected area, but the effect of that is limited because it doesn’t apply statewide. At the same time, major insurers have been pulling out of the state or limiting the number of policies they are writing in fire-prone areas.
The hurricane-prone states of Florida and Louisiana, and even Texas, are also facing skyrocketing premiums and homeowners companies pulling back on the policies they write.
Even in the Midwest and through the central planes, homeowners premiums are rising, and coverage is shrinking in the face of major hail, tornado, and convective storm losses.
As communities see the major insurers pull out, they are turning to smaller insurers to fill those gaps, and increasingly on so-called “unadmitted” or “surplus lines.” Admitted insurance policies are regulated by the state and have strict rules governing the premiums they can charge and the coverages they must offer. They are also backed by the state insurance backstop. If an admitted insurer goes bankrupt, the state backstop will still pay the claim.
Surplus lines are much less regulated, tend to have much higher premiums, and often have strict limits on what coverage they offer. They are also not covered by the state backstops. But in many communities, they are the only commercial option available, and the number of these policies is growing rapidly in some communities.
In some communities, there aren’t any commercial options for coverage, in which case, homeowners must rely on the state-funded insurer of last resort – often called the FAIR plan or Citizens plan, depending on the state. Most states mandate by law that these policies are the most expensive ones offered. Still, the rolls of these insurers of last resort have been growing fast in recent years.
Season of Change
For many people, springtime is a good time to look at rental insurance. That’s because springtime both represents the movement into the world that graduation presents, and it is also the traditional house-selling season.
In today’s rental insurance market, there seems to be two primary — and distinct — markets for rental insurance: Baby Boomers and Gen. Z.
Gen. Z is starting their lives, which means moving into a first apartment and protecting the precious few possessions they do have.
Baby Boomers are moving in the other direction. They are selling their empty nest homes and looking to downsize, all while protecting their lifetime of accumulated assets.
Gen. Z needs rental insurance to protect them from theft and liability while they are launching their lives. Baby Boomers need to protect their higher value items, as well as storage units and off-site property.
The challenge insurance professionals have is that both groups have a unique sales pitch. And both groups have a unique way they prefer to interact with the insurance industry — Baby Boomers tend to prefer in-person and over-the-phone meetings with agents whom they know. Gen. Z tends to prefer shopping through apps and web portals, minimizing human interaction.
Some members of Gen. Z also need to contend with rental insurance because they are moving away to college.
If a college student is living on campus in a dorm, their parents’ homeowners policy will offer some protection for their belongings, though a rental policy would offer more robust protection and more reasonable deductibles. If the college student moves into an off-campus apartment, they lose their parents’ policy protection and absolutely need their own rental insurance policy to protect their belongings, and themselves from liability if something goes terribly wrong.
College students and older Gen. Z members also need to think about health insurance. Thanks to the Affordable Care Act, they can stay on their parents’ health insurance plan until they turn 26, but that doesn’t mean the parents’ plan is necessarily the best deal.
If the child and the parents live in different areas, the child may be outside the insurance policy’s provider network. They may be able to pay to extend to a wider network, but they may also benefit from buying their own policy through their employer, their school, or through a state insurance marketplace.
Auto insurance is also tricky when Gen. Z leaves their parents’ house. If they still technically live at home, even if they have moved away to a dorm or college apartment, they can keep their parents’ auto policy, which will generally be less expensive than if they bought a policy on their own.
But it is important to let the agent know where the car is going to be located most of the year. If the new dorm or apartment is in a pricy ZIP code, there might be a higher premium to cover. Conversely, if the parents live in a pricy urban center and the child’s new home is in a less dense area, they may also be looking at a rate reduction.
And if the child goes off to school but leaves the vehicle in their parents’ driveway, that’s important to tell the agent because there is often a discount because the vehicle won’t be driven most of the year.
Although life insurance is typically sold as a product targeted toward parents and people planning for their retirement, there is also a good case for some in Gen. Z to buy inexpensive term policies.
Life insurance is meant to protect against lost income if someone dies prematurely. For parents, that protects their spouse and young children who haven’t yet started their lives. But for the youngest adults, life insurance may actually be to protect their parents.
In many cases parents take on debt on behalf of their children, with the understanding that they will be paid back down the line. Whether that is help with a first mortgage or a private student loan on the students’ behalf, if the student were to die suddenly, the parents would be left without ever being paid back.
An inexpensive term life insurance policy that names the parents as a beneficiary can protect from that.
Health Insurance
Fall is generally prime time for health insurance, but this spring presents a situation where it might make some sense to think about health insurance now.
First, the nation is in the final throes of one of the worst flu seasons in years – not to mention the specter of Bird Flu still hanging over the nation. Coupled with RSV and COVID cases, and with the emergence of the threat of Measles, vaccines may be top of mind for many people. Thankfully all Affordable Care Act compliant health policies provide vaccines at no cost for the patient. Any policy purchased through a state exchange and most policies provided by an employer will be ACA compliant.
The shakeup in the federal bureaucracy right now also presents a good opportunity to think about health care. Every government employee who is laid off will have to quickly figure out what they will do about their health insurance.
In the very short term, laid off employees can pay to extend their current coverage through COBRA, though that is often very costly coverage. They shouldn’t stop there. They should also look for a long-term solution.
One option is to see if their spouse’s employer is offering a health policy they could join. Another is to buy a subsidized policy from their state Affordable Care Act marketplace.
Both the option of joining a spouses’ plan and signing up for an ACA plan is typically only available in the fall during open enrollment. But losing a job is considered a change in life event. In the month following a change in life event, those open enrollment limits are waived, and people are free to make changes or to buy new coverage that will better suit them.
And then when they land on their feet and get a new job, they should then look to their new employer to see if they have subsidized coverage available.
People aren’t the only ones who need health insurance, either. Many major insurers also offer insurance to protect the family’s pets.
Pet insurance comes in three basic types – accident only; accident and illness; and accident, illness, and wellness.
Accident, illness, and wellness policies protect the pet from accidents and catastrophic illnesses, but it also covers routine care, such as annual physicals and vaccinations.
Accident and illness policies don’t cover routine care but would kick in if the pet came down with a significant diagnosis, such as cancer or kidney disease.
Accident-only policies protect the pet in case they do something like tear a muscle as they are jumping off a bed, though they provide no coverage for illnesses or wellness care.
The accident-only policies are the most affordable, with prices going up as categories are added.
Premiums are based on the pet’s age and breed and tend to get more costly as the pet gets older.
Springtime Insurance
Spring is all about transitions – whether it is transitioning to a new living situation or a new chapter in life, or reacting to the political environment around us.
While things keep getting more expensive, there are ways people can use springtime to try to combat rising premiums. The first key is to shop each year for new policies, both to ensure you have the right policy, but also to ensure you are paying the best price. It is always good to make sure you aren’t over insured, or under insured, for that matter. Letting your agent know about your whole life situation helps, because sometimes having good health insurance means you don’t have to pay quite as much for uninsured motorist protections on an auto policy, for example.
The tried-and-true solutions also apply, such as bundling policies. Being smart about deductibles is also a good idea — higher deductibles come with lower premiums but remember not to set your deductible so high that if the worst happens you are stuck with a financial hole you can’t climb out of.
Also look at places you might be double insuring, such as travel insurance or auto rental insurance that might also be included by using a premium credit card. But also pay attention to the fine print. Add-on insurance from a credit card may be secondary coverage, for example, or may have lower limits than you need. The key is to look at the whole picture.
From rental coverage to changing health plans, to just tidying up existing coverage, springtime makes a great opportunity to stop and look at all things insurance.
Michael Giusti, MBA, is senior writer and analyst for InsuranceQuotes.com
