Protecting Margins in the Tariff Era: How New Tariffs Are Reshaping Insurance Claims Management

The insurance industry is facing a transformative challenge as new tariff policies reshape the landscape of claims management and risk assessment. A recent whitepaper from Adjusto reveals critical insights that every insurance professional should consider in their strategic planning for 2026 and beyond.

The Hidden Multiplier Effect

While many industries are grappling with tariff impacts, the insurance sector faces a unique challenge: the multiplier effect on claims severity. The U.S. government's implementation of a 10% universal tariff has catalyzed a dramatic shift, pushing the average effective rate from 2.2% to 9% in just six months. For insurance professionals, this isn't just a statistical change...it's a fundamental restructuring of claims economics.

Where the Pain Points Are

The most significant impacts are appearing in categories that traditionally dominate property claims:

• Electronics and Technology: With price increases of 7-14%, even routine claims for damaged laptops or smartphones now carry substantially higher replacement costs
• Household Essentials: Clothing claims, often overlooked as minor, now face 10-20% higher replacement costs
• Major Appliances: An 8-15% increase in costs is affecting everything from refrigerators to HVAC systems
• Furniture: A 6-13% jump in prices is impacting both residential and commercial property claims

The Timing Challenge

One of the most insidious aspects of the current tariff regime is the timing risk. Claims professionals are finding themselves caught between initial valuations and final replacement costs, as prices continue to drift upward during the claims process. This creates a perfect storm for customer dissatisfaction and increased disputes.

Strategic Imperatives for Insurance Professionals

1. Embrace Technology Integration
   Insurance professionals must leverage AI-powered pricing engines and digital verification systems to stay ahead of price volatility. Real-time pricing data isn't just a convenience – it's becoming a necessity for accurate claims handling.

2. Revise Risk Assessment Models
   The traditional approach to risk assessment needs updating. Insurance professionals should:

• • Factor tariff-driven severity trends into their underwriting decisions
  • Review and potentially adjust sub-limits for highly affected categories
  • Strengthen relationships with reinsurance partners to address correlated risks

3. Enhanced Customer Communication
   With replacement costs rising, managing policyholder expectations becomes crucial. Clear communication about how tariffs affect claim settlements can help prevent disputes and maintain trust.

Looking Ahead

The industry consensus is clear: tariffs are not a temporary phenomenon but a structural change requiring strategic adaptation. Insurance professionals need to position themselves at the forefront of this change by:

• Developing more sophisticated pricing models that account for tariff volatility
• Building stronger partnerships with suppliers and restoration contractors
• Investing in technology that can track and predict price movements
• Training staff to handle more complex valuation discussions with policyholders

Lamps 3:16

As Robert Hartwig from USC notes, "Import taxes will unquestionably raise claim severities across all auto and property lines"