Commercial property owners face increased repair and maintenance costs as tariffs on imported goods rise. This year, the U.S. government implemented new tariffs that significantly affect the prices of materials used in property repairs. These rising costs can also impact commercial insurance premiums, as insurers factor in the increased expense of repairs when calculating coverage.
Let’s explore how these rising tariffs impact repair costs and what business owners can do to prepare for these changes.
A tariff is a tax on imported goods designed to encourage the purchase of domestic items by making foreign goods more expensive. Many essential materials for commercial property repairs, such as steel, aluminum, and electrical components, are imported. As tariffs increase the cost of these materials, the overall cost to repair or maintain commercial properties rises.
The tariffs on construction materials were raised, leading to a significant price increase for materials critical to major repairs and minor renovations. These price hikes are passed to commercial property owners, raising overall repair expenses.
Rising tariffs are directly affecting the cost of repairs. Here’s how:
Tariffs on imported construction materials such as steel and aluminum have increased prices by up to 25%. As a result, commercial properties requiring structural repairs or renovations involving these materials now face higher costs.
Repairs often require specialized parts, such as electrical components, HVAC systems, and plumbing fixtures, many of which are imported. The new tariffs on these components have raised prices, increasing repair costs.
Tariffs also affect contractors who rely on imported goods. Higher material costs can lead to delays in sourcing supplies, prolonging repair timelines and increasing labor costs, ultimately adding to repair expenses.
As of April 2025, the U.S. has imposed a 25% tariff on steel, aluminum, and other key materials from countries like China and several European nations. This move aims to boost domestic production, but for commercial property owners, it means higher material costs for repairs and renovations.
The price of materials like steel and electrical components has risen sharply in recent months. As tariffs continue to impact the cost of imports, repair costs are expected to continue rising.
Rising repair costs due to tariffs could influence your commercial property insurance premiums. Insurers calculate premiums based on the property’s value and the repair or replacement cost. As material and repair costs increase, your premiums may rise as well.
When filing an insurance claim, the rising cost of materials and labor due to tariffs may lead to higher pay-outs. However, this could also cause premiums to increase as insurers adjust to the higher cost of repairs.
To manage the impact of rising repair costs, commercial property owners can take several steps:
Make sure your insurance policy reflects the rising cost of repairs. Regularly reviewing your coverage ensures that it accounts for tariff-driven price hikes on materials and protects you from unexpected expenses.
Knowledge is power. Keeping up with tariff adjustments and understanding how they impact material prices can help you budget for upcoming repairs and avoid surprises.
Work with experienced contractors who understand how tariffs are affecting material costs. Their expertise can help you make smarter choices when sourcing materials and managing repair costs, keeping your project on track without exceeding your budget.
Rising tariffs are making commercial property repairs more expensive. Property owners will face higher repair bills as material costs such as steel, aluminum, and electrical components continue to rise. Business owners must stay informed about tariff changes and prepare for rising costs.
At CF&P Insurance Brokers, we understand the challenges of increasing repair costs. We recommend reviewing your commercial property insurance policy to ensure you’re adequately covered. If you have questions or need assistance adjusting your policy, contact us for a free quote or call our team at (925) 956-7700 today.
