Ontario home and auto insurance rates are expected to rise due to US tariffs on Canadian products, according to digital insurance marketplace RATESDOTCA.
A 25% tariff on imported Canadian steel is set to take effect on March 12. The tariff is part of broader US trade measures aimed at protecting domestic steel production but is expected to impact several industries in Canada, particularly automotive manufacturing and construction, both of which rely heavily on steel products. The increased costs of materials and production in these sectors could have a ripple effect on insurance premiums.
RATESDOTCA warns that as the cost of vehicles and homes rises, so will claims costs for repairs and replacement, ultimately leading to higher insurance premiums.
“Tariffs are likely to increase the cost of vehicles and homes, which will eventually make their way into insurance premium prices,” said Daniel Ivans, RATESDOTCA insurance expert and licensed broker, in a statement.
Canadian insurers are monitoring the situation very closely. According to a spokesperson for the Insurance Bureau of Canada, insurers will likely feel the squeeze soon after the tariffs take effect. Higher claim costs would often translate to higher insurance rates, especially in the provinces where private insurers must justify rate hikes to regulators.
Additionally, insurance rates are partly determined by claims expenses, which include the cost of replacing or repairing damaged vehicles and homes. If construction and vehicle manufacturing costs rise due to higher-priced steel, insurers may pass these expenses on to policyholders in the form of increased premiums.
The full impact of the tariffs on insurance rates is uncertain and will depend on how long they remain in place. Ivans noted that it will take time for the effects to work through the system, but consumers should be prepared for potential increases in home and auto insurance costs.
Meanwhile, the Canadian government also announced counter-tariffs against US-made products, in response to what Prime Minister Justin Trudeau called an “unjustified decision” from the US administration.
The first stage is 25% tariffs on about CA$30 billion worth of goods from US exporters, and will go into effect at 12:01 a.m. New York time unless the US drops its tariffs. A second round of tariffs at the same rate will be placed on CA$125 billion of products in three weeks — a list that will include big-ticket items like cars, trucks, steel and aluminium.
