Do Tariffs Affect Insurance?

Most of us have heard the buzzword “tariff” lately. Whether the word is something you look up online or keeps you up at night, tariffs are the biggest thing in financial and economic news.

But do they affect insurance?

The answer is—kind of. While they may not directly impact insurance companies or policies, insurance is still a part of the economy and will feel the weight of tariffs. Here are a few ways that you may notice them:

• Price Increases - If tariffs drive up the cost of vehicles and homes, insurance could be affected. Insurance places value on how much it would cost to repair or replace an item (replacement cost), but that doesn’t mean overall market cost won’t affect things, particularly in certain areas like new cars.
• Repair Costs - If prices go up for parts or raw materials, repairs could become more expensive. That means a claim could be more costly and change how much risk an insurance company wants to experience.
• Claims Change Premiums - If claims become more expensive, premiums could rise. The American Property Casualty Insurance Association (APCIA) recently said, “Given insurers’ expenses beyond the direct cost of claims, the total premium impact will likely be higher.”¹

For now, nothing is certain—this is a rapidly changing topic that may differ from hour to hour, let alone day to day. The important thing is that we will continue to do what is best for you and your policies, making sure that you have the best coverage we can offer at the best value.

^{1. InsuranceJournal.com, April 2025}