Summer 2025 Insurance Guide
By Michael Giusti
Summer 2025 is a season filled with anticipation and questions. Will there be a recession? Will tariffs become a worst-case scenario? Will international travel become a new nightmare? Will the upcoming hurricane and wildfire seasons wreak havoc or pass by quietly? Will new federal policies cause overseas manufacturing to come streaming back to the United States, offering an economic boom?
That uncertainty has found its way into many lines of insurance. Health, travel, auto, and homeowners policies could all find themselves influenced by politics, current events, and even the weather.
In this 2025 Summer Insurance Outlook, we will examine many of the ways that the insurance industry is prepping for the coming season.
Travel Insurance
Many of the headlines leading into summer stemmed from travel.
Whether it is a story of being held up at an international border, or delays and cancelations caused by air traffic control debacles, summer travel could hold the potential for more uncertainty than in years past.
Some of the most dramatic headlines came out of Newark airport following the relocation of their air traffic control center from New York to Pennsylvania, when technical failures caused air-monitoring equipment to fail for minutes at a time.
But air traffic control woes aren’t necessarily limited to Newark. By some estimates, the nation is facing a staffing shortage of 3,000 air traffic controllers. The Department of Transportation announced it is planning to vastly upgrade its air traffic control technology in the coming years, but at least for the near term, delays could mean uncertainty for summer travel.
Thankfully, problems with air traffic control would likely count as a mechanical failure, which are typically covered by travel insurance policies. However,it is always important to read the fine print of the contract before purchasing because many policies differ in the details of what they cover.
At its core, travel insurance pays for non-refundable costs caused by a covered peril that gets in the way of a trip. Travel policies excel at protecting against things like illnesses or weather events interrupting the trip. But they also are handy for helping with mishaps while the trip is in progress — such as delays.
If an air traffic control issue caused a significant delay in a trip, the travel delay portion of the insurance policy would likely kick in.
Each policy differs on what qualifies as a minimum delay, but they can range from three hours at the minimum to six or more hours. But once that minimum delay is met, the policy will help cover many of the expenses that plague delayed travelers.
Delayed travelers who keep their receipts can claim the cost of meals eaten during the delay, and if the delay lasts into the next day, they can claim the cost of the hotel stay and transportation to and from the hotel. The daily reimbursement does have a cash-value limit, though, so it’s probably not a good idea for a traveler to treat themselves to a steak dinner and a stay at a five-star resort and expect a full reimbursement.
Travel policies will also cover prepaid expenses for things the traveler was forced to miss due to a missed flight, such as a tour or a show at their final destination they no longer can attend.
Travel policies also help cover lost luggage.
A typical travel policy costs a percentage of the total insured cost of the trip — often 4% to 10%, depending on what is covered.
All that said, travel insurance isn’t strictly necessary, depending on the details of the trip.
If the trip is primarily a domestic flight and a stay at a brand-name hotel, the airline and hotel reimbursement policies might suffice.
Though, it is important to know that while the airline is required by federal rules to reimburse travelers for canceled flights, they all have their own policies for reimbursements for delays. Also, to get the federally mandated refund, travelers must refuse the rebooking and find their own way to get to their destination.
Federal rules also allow for generous compensation if the flight is on time, but the traveler gets involuntarily “bumped” from the flight because they overbooked the number of tickets available.
Most hotels offer full refunds, as long as the cancelation is at least 24 hours before the planned stay.
Coverage for travel delays and flight cancellations aren’t the only reason a traveler might consider a travel insurance policy, though. Travel policies are also helpful when it comes to protecting travelers during activities during their trip, such as boating, biking, and hiking.
If someone is injured during their trip, many travel insurance policies offer medical coverage that either stands in for the traveler’s regular health insurance plan, or it serves as secondary insurance, meaning it would let the primary insurance cover the claim, but then step in for any excess or uncovered expenses.
It’s important to pay attention to the details here, too. Some travel policies exclude adventure travel, so if the injury was during a scuba adventure or a sky diving outing, the traveler might be out of luck. On the other hand, some policies specialize in protecting adventure travel, so it’s worth it to know what could be on the itinerary before buying a policy.
While hotels tend to have generous refund policies, the same can’t always be said of home rentals. In many cases, house rental hosts require nonrefundable up-front deposits or even payment in full in advance of the trip. Some rental sites offer opt-in insurance for this. Otherwise, a travel insurance policy can cover it, as long as it was included in the cost of the trip when the policy was purchased.
Another key detail summer travelers need to keep in mind is the new Real ID requirement that took effect in May. Now, anyone over 18 looking to travel by plane needs to have an updated ID that conforms to the federal Real ID standards. State IDs that comply generally have some form of a star in the upper right-hand corner.
In lieu of a Real ID, travelers can still use a military ID or a passport to board the plane.
At least for now, if someone inadvertently shows up to the airport without a valid Real ID or other acceptable form of secure ID, there is still a way for them to get through security. But it will require an extended screening and extra protocols, which could cause travel delays or missed flights. And unfortunately, travel insurers don’t consider not having a Real ID as a covered reason to reimburse a trip. The same goes for not having a proper visa or valid passport. All of those are considered preventable and predictable, so they aren’t covered.
And much like not having the proper travel documents, being delayed at the border by a Customs agent or by TSA isn’t likely a covered peril and wouldn’t likely be covered by travel insurance unless the traveler had a Cancel For Any Reason or an Interrupt For Any Reason policy.
Similarly, fear of travel isn’t covered by travel insurance, so if there is a war, or communicable disease outbreak, or civil unrest that makes the traveler uncomfortable, they would need to have a Cancel For Any Reason policy if they wanted to call off their trip and still be reimbursed.
The catch with Cancel For Any Reason policies is that they cost more than standard policies, and they reimburse only part of the costs of the trip as a way of keeping skin in the game for the travelers.
Auto Insurance
The main auto story of the summer is the question of tariffs. Although the question of what tariffs apply to which goods and from which country has constantly been in flux, some imported autos and replacement parts are now subject to a 25% tariff, and more could be on the way.
Higher tariffs will most likely lead to higher costs for car buyers and for car repairs. And the costs of buying and repairing vehicles directly impacts the cost of auto insurance. That is because when replacement costs go up for a vehicle that is totaled, the insurer has to pay out more, which leads to higher premiums.
Similarly, when repair costs go up because of more costly auto parts, then the insurer will need to pay more to repair a vehicle after an accident, which again can lead to higher premiums.
On the bright side, although auto premiums have been rising constantly since the end of the pandemic, many analysts are now saying today’s premiums are likely sufficient to cover losses, meaning insurers may likely put the brakes on rate hikes at least for the short term, though any effects tariffs might have aren’t yet priced in.
Regardless of tariffs and the future of premiums, summer often means road trips, and it is a good idea to have a mechanic give the vehicle a health check before hitting the road for a long trip. It is also a good idea to have a plan for what roadside assistance the traveler might use if they hit a snag along the trip.
Most insurers include roadside assistance as a low-cost upgrade to their auto policies. On the other hand, many drivers prefer getting their roadside assistance through a third party, such as AAA. Whichever way makes the most sense, it is a good idea to have a plan before being stuck on the side of the highway.
Homeowners Insurance
Like auto repairs, more costly home repairs also tend to lead to higher insurance premiums. Tariffs on things like lumber and steel can trickle into home repair costs, and immigration policy has the potential to make labor costs for home repairs go up.
However, unlike auto insurance, homeowners policies are still priced at a point where insurers’ losses are exceeding the amount brought in through premiums, meaning that in addition to whatever effect federal policies might have on costs, homeowners premium increases are likely going to be a fixture for at least the next year.
Homeowners policies have been shelling out billions for natural disasters in recent years, from hurricanes and wildfires to floods and hailstorms. And by all measures, summer doesn’t look like it will be letting up in that arena.
In advance of the June 1 launch of hurricane season, the National Weather Service issued its hurricane outlook. That outlook calls for above-normal activity, with 13 to 19 named storms likely.
And when it comes to fires, the National Interagency Fire Center is predicting that by August, significant wildfire risk will range from Montana, through the Pacific Northwest, and then down into southern California.
All of this is happening amid the backdrop of shaky homeowners insurance markets in many states, not the least of which are California, Florida, and Louisiana. In California alone, many insurers have pulled back from covering some communities or have left the state altogether. Major insurers are filing for significant rate increases. And many insurers have stopped writing policies in wildfire prone areas. In Florida and Louisiana, customers are signing on to the state insurers of last resort at unprecedented levels because they just can’t find coverage on the open market.
Even in the Midwest and through the central planes, homeowners premiums are rising, driven largely by major hail, tornado, and violent thunderstorm losses.
Regardless of what state the home is in, summertime activities also bring to mind insurance questions. Homeowners policies are key to protecting summertime activities at home.
When it comes to barbecues, fire danger is one of the first things to consider. If the grill was set too close to the home or a fence and the flames jump to the structure, homeowners insurance would be the place to look to repair those damages once the flames are extinguished.
And if a guest gets sick from potato salad left in the sun, or from that out-of-control grill flame, the medical payments portion of the homeowners policy would kick in. This portion of the policy pays out a small amount to cover the medical costs of guests who are injured at a policyholder’s home as a good will gesture to help fend off any lawsuits.
If the injury is serious, like someone falling off a trampoline and shattering a hip, or getting a major injury poolside, the liability portion of the homeowners policy would kick in, protecting the policyholder from a lawsuit.
One place the homeowners policy wouldn’t help would be in the case of a summer pest infestation. If termites were to invade the home, that would be excluded by most homeowners policies. Instead, homeowners can buy separate treatment and insurance contracts with exterminators.
Health Insurance
Summertime is not typically the season to think about health care. Open enrollment is still months away. But with the shifting federal trade and tariff policies, as well as movements in Congress that might cut into Medicaid, there are a few health issues to think about this summer.
For now, pharmaceuticals are not subject to tariffs. However, President Donald Trump says he plans to issue tariffs on them soon, which could raise prices at the pharmacy counter and particularly for insurers who are locked into pricing schedules until this policy year ends.
Tariffs in particular could drive up costs especially for generic drug makers who operate under tight margins. Strain on generic manufacturers could lead to them going out of business or not selling to the U.S. market, which could mean shortages at the pharmacy.
Tariffs could have an impact even for domestic pharmaceutical manufacturers. That is because raw materials used to make the drugs, known as active pharmaceutical ingredients, are almost exclusively manufactured overseas, namely in China. Raising tariffs there could drive up costs for domestically produced drugs.
And tariffs on imported medical supplies like gloves, gowns, and surgical tools all promise to increase costs that will be passed on to the insurer, and then to consumers when it comes time to renew their policies.
In Congress, the so-called ‘One Big Beautiful Bill’ that has been passed by the House and is being debated in the Senate, could have a major impact on Medicaid. The cuts laid out in the House version of the bill could lead to millions of people losing their coverage, either through work requirements, complex documentation requirements, or other provisions. The proposed Medicaid reimbursement rates could also cut deeply into the budgets of rural hospitals, potentially putting many of them in financial peril.
Analysts worry that cuts to Medicaid will likely mean more uncompensated care with uninsured people seeking care in emergency rooms and unable to pay. Those costs are typically passed on through higher costs for customers with private insurance, leading to higher premiums at the time of renewal.
Even for people not on Medicaid, the bill could ripple through the fall policy renewals because it doesn’t renew the increased Affordable Care Act premium subsidies put into place five years ago.
By some estimates, the loss of those subsidies could increase the cost of an Affordable Care Act Marketplace plan for many people from between 7% and 700% higher for a typical policy.
One thing the bill does do that benefits some people in the health care space is it proposes a boost to health savings accounts. It would increase the HSA contribution limits and expand what the accounts can be used to pay for.
The bill is still working its way through Congress, so nothing is set in stone yet.
Hot Insurance Topics
Summer 2025 brings with it a heavy dose of uncertainty, with economic shifts, global politics, and natural disasters all looming as potential disruptors. From travel delays and tariff-driven auto part price increases to wildfire risks and Medicaid overhauls, the insurance industry is being pushed to anticipate and adapt at a rapid pace.
Whether it’s purchasing travel coverage for a once-in-a-lifetime adventure, reviewing auto policies ahead of a road trip, double-checking home protections before fire season, or watching the headlines for health insurance impacts, consumers would be wise to take a proactive approach this summer.
While no one can predict what the season will bring, smart insurance choices can at least help soften the blow if things don’t go according to plan.
Michael Giusti, MBA, is senior writer and analyst for InsuranceQuotes.com
