Ing + McKee

The Impact of Tariff Wars on Alberta’s Home and Auto Insurance Market

March 13, 2025

In recent years, the global landscape has been significantly shaped by tariff wars, and their ripple effects are being felt across various industries. For the insurance sector, particularly in Canada, these economic shifts present unique challenges but also some opportunities. At Ing & McKee Insurance, we understand that the economic landscape can feel uncertain, especially with recent tariff wars impacting various sectors, including home and auto insurance. We genuinely care about our clients and their experiences, and we want to share how these changes influence your insurance premiums.

Rising Costs in the Auto Insurance Sector – One of the most immediate effects of tariff wars is the increase in costs for auto parts. The United States, a major trading partner, has imposed tariffs on several key imports, including steel and aluminum. Canada is a significant supplier of these materials. So what does this mean?

When Canada buys vehicles and parts from the United States, tariffs imposed by both countries will affect the prices. Here’s how it works:

  1. Tariffs on Imports: American companies have to pay more to buy Canadian steel and aluminum because of the increased tariffs. When vehicles are imported from the United States to Canada, Canadian tariffs are applied to these vehicles, causing a trickle effect.
  2. Higher Prices: For instance, a vehicle priced at $30,000 could see a significant jump due to a 25% tariff, making it $37,500. This cost increase doesn’t just affect buyers; it trickles down to insurance companies as well. When repair costs rise, so do the premiums our carriers charge to cover those expenses.
  3. Impact on Repairs: Higher prices for vehicle parts mean that repairing or replacing parts becomes more expensive. When it costs more to fix cars, insurance companies have to pay more when people file claims for repairs. To cover these higher expenses, insurance companies raise their premiums.
  4. Overall Effect: Even though Canada supplies a lot of steel and aluminum, the tariffs make these materials and the parts made from them more expensive. This leads to higher costs for vehicle parts and repairs, which ultimately results in higher auto insurance premiums for everyone.

By focusing on purchasing vehicles and parts from Canadian suppliers, we can avoid these tariffs and help keep costs down. This strategy supports local businesses and helps manage insurance premiums more effectively.

Home Costs Increasing

Similarly, the construction and repair of homes are not immune to these changes. Tariffs on building materials lead to higher prices for items like lumber and steel. Higher building costs inevitably affect home insurance premiums.

  1. Tariffs on Building Materials: Many construction materials are imported from other countries. When tariffs are imposed on these materials, it means that the cost to import them into Canada increases.
  2. Higher Prices for Materials: The tariffs make these building materials more expensive. For example, if lumber costs $1,000, a 25% tariff would add an extra $250, making it $1,250
  3. Impact on Home Construction and Repairs: Higher prices for materials mean that building or repairing homes becomes more expensive. When it costs more to build or fix homes, insurance companies have to pay more when people file claims for home repairs. To cover these higher expenses, insurance companies raise their premiums.
  4. Overall Effect: Even though Canada produces a lot of these materials, the tariffs make them more expensive when imported. This leads to higher costs for home construction and repairs, which ultimately results in higher home insurance premiums for everyone.

Purchasing from Canadian Suppliers

To help manage these costs, one effective strategy is to prioritize purchasing from Canadian suppliers. By sourcing construction materials locally, we can avoid the extra costs associated with tariffs. This not only helps in managing expenses but also supports the local economy and strengthens community ties. Canadian suppliers often adhere to stringent environmental and quality standards, ensuring that we receive high-quality products while reducing our carbon footprint.

We genuinely care about our community and believe in the power of local businesses. By supporting Canadian suppliers, we can work together to keep costs down and maintain a stable and fair insurance market for everyone. We know that when we support each other, we all thrive.

To make it easier for you to shop for Canadian products, we’ve gathered some valuable sources to help you find local products and services. Let’s strengthen our economy and build a brighter future.

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