Wildfire, Hurricane Rebuilding Efforts Impeded By Tariffs: APCIA

American Property Casualty Insurance Association issued a statement on behalf of P/C insurance company members on Tuesday, the day that 25 percent tariffs on most goods from Canada and Mexico took effect.

While supporting the idea of tariffs, David A. Sampson, APCIA president and chief executive officer said they will likely hinder rebuilding efforts to properties destroyed by the January 2025 California wildfires and two hurricanes last year.

“APCIA supports efforts to ensure our trade partners are living up to their commitments and that our global rivals are not dumping underpriced goods into our economy. APCIA also supports efforts to gain control of our borders, stop the flow of illegal drugs into the U.S., strengthen our national security by rebuilding American manufacturing, and provide more jobs for American workers,” Sampson said.

“However, the newly enacted 25 percent tariffs on Mexico and Canada, along with additional 10 percent tariffs on China, will likely disrupt vital reconstruction material supply-chains at a critical moment of rebuilding from recent catastrophes, including Hurricane Helene and Milton and the unprecedented California wildfires. The impacted areas already face reconstruction challenges, and the added increased cost burdens will likely significantly affect the recovery efforts.”

Sampson also noted tariffs are likely increase the cost of auto replacement parts, adding to repair costs that are factored into auto insurance pricing.

According to APCIA estimates, annual personal auto insurance claims costs could jump by billions—anywhere between $7 billion and $24 billion.

Also on Tuesday, executives from several personal lines insurers—Progressive, Allstate and Kemper—discussed the profitable years they had last year, after having to raise prices to deal with prior inflationary pressures. The executives largely said they are monitoring cost jumps related to the tariff war between U.S. and other nations, and stand ready to react if needed to shore up pricing. The overriding sentiment seemed to be that there is some room in current profit margins to absorb some pressure from tariff-induced loss cost increases, but not all of it. Additionally, Progressive’s CEO Tricia Griffith offered a scenario under which tariffs create a tailwind for commercial auto insurers.

Concluded Sampson: “Tariffs can be effective tools of government if used with precision. However, these new tariffs are so broad that they are likely to hurt families, individuals, and business owners they are meant to protect.”

“All of these increased costs would adversely affect home, auto, and business insurance affordability nationally, at a time when the marketplace is already plagued by legal system abuse and regulatory uncertainty,” Sampson said in the APCIA statement.

Source: American Property Casualty Insurance Association