The concern about tariffs, expressed by insurance companies is that raising the costs of auto parts will create a corresponding increase in claims. Insurance, at its core is about financial leverage to replace a potential loss. If the loss is higher than expected, then premiums must rise to cover higher claim costs. The 25% tariff on auto parts from China could raise collision repair costs for insurers by 2.7%, which could lead to an additional $3.4 billion ultimately passed on to policy holders (you and I).
And tariffs on Canadian lumber could add thousands of dollars to the cost of a new home along with the costs of repair and replacement. With homeowners claims expected to be high again this year due to Hurricane Florence and multiple wildfires, it is likely that homeowners premiums will also increase next year. P/C Insurers See Trump Tariffs Spiking Costs for Auto and Home Coverage.
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