Democrats’ victory in both chambers of Congress has reshaped Washington’s insurance agenda, raising the prospect of closer scrutiny of coverage costs while leaving the industry’s priorities dependent on negotiations with President Donald Trump.
Democrats have secured majorities in the House and Senate in Tuesday’s midterm elections. The result ends unified Republican control when the new Congress takes office in January, giving Democrats greater leverage over legislation and oversight during Trump’s remaining two years.
However, it does not give Democrats a clear path to enact their own program. Allianz’s economists noted that the party lacks a filibuster-proof Senate majority, while Trump can veto legislation, limiting the scope for near-term policy changes.
Insurance brokers face immediate questions about federal flood and terrorism insurance legislation, alongside a longer debate over affordability.
Read more: As insurance affordability becomes a 2026 election issue, agents must deal with the fallout
Congressional gridlock could also complicate efforts to address liability costs, while the administration retains considerable room to pursue trade measures affecting claims expenses.
Before the election, the American Property Casualty Insurance Association anticipated that a Democratic House would focus on oversight and affordability, including insurance’s contribution to housing costs.
Read more: Why home insurance prices are quietly becoming a 2026 midterm flashpoint
State regulators retain responsibility for insurance licensing, product filings and rate reviews, as applicable under state law. A change in congressional control alone therefore leaves the machinery governing many everyday placement decisions in state hands.
The liability agenda could face resistance. Before the vote that advancing third-party litigation funding reform would be challenging under a Democratic House. Insurers have sought greater transparency around outside investment in lawsuits, arguing that litigation practices contribute to insurance costs.
With both chambers changing hands, industry advocates will need support from the incoming leadership to advance that legislation.
Meanwhile, the outgoing Congress still faces insurance decisions before the new majority arrives.
The National Flood Insurance Program is authorized through December 11. The Big “I” has called for long-term reauthorization and, at a minimum, action preventing a lapse. It also opposes reductions in Write-Your-Own carrier reimbursements and measures undermining independent agents’ role in selling and servicing flood coverage.
Terrorism insurance presents another unfinished task. Both chambers have passed reauthorization bills, but differences must be reconciled before legislation reaches Trump. The existing federal backstop expires December 31, 2027. The Big “I” has been pressing for a final agreement during the post-election session.
The outlook for insurance costs also depends on trade policy, where the administration retains considerable freedom to act despite the Republican losses. However, this remains a source of uncertainty for insurers and commercial clients, according to Jonathan Steenberg, lead economist at Coface.
“The President retains primary authority in these areas, leaving Congress with relatively little scope to alter the overall direction of policy,” Steenberg said. “As a result, the risk of tariffs returning to the forefront remains significant, regardless of the election outcome.”
His assessment suggests brokers should remain alert to changes in clients’ replacement costs and trading exposures. Tariff-driven increases in imported parts or materials can affect repair bills and the adequacy of insured values, even while domestic legislation stalls.
Read more: Midterm elections: Why a 'blue wave' may leave insurers’ tariff problems intact
“The run-up to the midterms created strong incentives to avoid major policy risks or trade escalations. With the election now behind them, those constraints are likely to ease,” Steenberg said.
Although the effective US tariff rate has declined from its 2025 peak, Steenberg pointed to investigations involving semiconductors, pharmaceuticals and critical minerals as evidence of continuing trade tensions.
He said tariffs or other trade measures could become more likely as the administration pursues its broader strategy.
