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Steel Tariffs Carry Potential to Bump Up Insurance Premiums

March 13, 2018

Among other items, President Trump’s plan to impose a 10 percent tariff on aluminum could lead to higher beer prices and job cuts. But that’s only the beginning.

Premiums are set in part based on the value of goods. So if you’re in the construction business, the steel tariffs will influence your insurance costs.
CCIG’s Eric Gabrielsen.

The impact of the tariff on aluminum and an even bigger tariff (25%) on steel will influence prices on cars, refrigerators and all kinds of other manufactured products.

What does this have to do with insurance? Quite a lot.

Premiums are set in part based on the value of goods. So, for example, if you’re in the construction business and the cost of the steel and aluminum go up as a result of these tariffs, then so, too, will your insurance costs rise.

None of this is welcome, we know.

Premiums also may rise with inflation, something we might see as part of whatever trade skirmishes potentially ensue from the president’s plan to impose these new tariffs.

Insurers, by the way, also will adjust premiums when they see changes in taxes. A tariff, of course, is really nothing more than a tax.

Also, poor investment returns will prompt carriers to bump up premiums to help ensure they have sufficient capital to pay future claims. The stock market didn’t respond well to the tariff news and typically performs poorly when nations battle over trade issues.

It should be said that unless things get out of hand, the potential impact of the aluminum and steel tariffs alone might not make a huge difference. The U.S. has a $20 trillion economy and, as many economists pointed out after the news broke, we imported $47 billion in aluminum and steel last year. The tariffs would add only about $9 billion to the cost of those imports, a sliver of the overall economy.

On the other hand, the move will mean certain items – including insurance – will cost us more and could hurt longtime trading partners such as Brazil and South Korea.

Eric Gabrielsen is a CCIG Insurance Adviser. Let him know if you have questions or concerns. Reach him at or 720-212-2027.

CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We also help you manage your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.

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