Ultra-high-net-worth(UHNW) individuals face a unique set of vulnerabilities in an era defined by economic volatility and shifting trade policy. Recent U.S. tariffs on imported goods, from raw construction materials to luxury automobiles, have not only raised costs, but also introduced unexpected pressures across insurance programs designed to protect significant assets. Rising inflation, supply chain instability, and global trade tensions are colliding in ways that expose gaps and inefficiencies in traditional insurance models. For UHNW individuals and their advisors, understanding how these dynamics affect insurance risk is essential.
This article highlights three key areas where tariffs are reshaping risk and insurance considerations for wealthy families: luxury real estate development, corporate board service, and foreign luxury vehicles.
Construction Tariffs and Luxury Real Estate Insurance
Tariffs on core construction inputs such as steel, aluminum, lumber, and imported fixtures are driving up costs and introducing delays, especially in premium markets like South Florida and resort communities in the Mountain West. Homes in places like Vail, Jackson Hole, and Aspen often rely on globally sourced materials, Canadian timber, Italian marble, or German windows, that are now more expensive or harder to obtain due to import duties. Approximately 30% of the steel used in the U.S. is imported, with Canada being the largest supplier. Similarly, nearly one-third of U.S. softwood lumber comes from Canada and is frequently subject to tariffs.
Asa result, developers and homeowners are experiencing escalating project budgets. CBRE estimates that broad-based tariffs can raise development costs by3–5% in the near term, with luxury builders often budgeting even higher to account for uncertainty. These costs increases ripple directly into insurance:
A less visible but growing concern is legal and contractual risk. In many luxury construction projects, fixed-price contracts may not account for sudden 25%increases in material costs. This can lead to disputes between owners, contractors, and suppliers, potentially drawing in performance bonds or liability policies if corners are cut or workmanship is compromised. Insurers, in turn, are revisiting how they underwrite large-scale luxury construction projects, particularly those with significant import reliance.
These combined forces: rising claims, legal disputes, and reinsurance constraints, are straining the high-value property insurance market. In response, some carriers are exiting certain regions or coverage types altogether, leaving fewer options for wealthy homeowners seeking comprehensive protection.
Economic Disruption and D&O Liability Risks
Tariff-driven volatility doesn’t just affect physical property. It’s also creating exposure in the boardroom. Many UHNW individuals sit on corporate boards or hold significant private equity stakes in global businesses. For them, the intersection of trade policy and Director & Officer (D&O) liability insurance is increasingly relevant.
Tariffs can function as an economic shock. When a company’s profitability is threatened by trade restrictions or increased input costs, shareholders may respond with litigation, alleging that directors failed to disclose material risks, breached fiduciary duties, or mismanaged trade exposure.
Common D&O risk triggers in a tariff environment include:
As the risk landscape evolves, D&O underwriters are adjusting. Companies with complex global supply chains are facing tougher questions during renewal. Premiums, retentions, and exclusions may be increasing. For UHNW board members, ensuring robust insurance and internal documentation of risk oversight is more important than ever.
Tariffs, Foreign Luxury Cars, and Rising Auto Insurance Costs
Foreign luxury automobiles represent another touchpoint where trade policy intersects with insurance costs. While large-scale U.S. tariffs on finished vehicles have not been fully implemented, the possibility alone has reshaped pricing and inventory strategies. Luxury vehicles also depend on imported parts for maintenance and repair, many of which now carry increased costs or face longer lead times due to customs delays or trade uncertainty.
Roughly60% of replacement parts used in U.S. auto repairs are imported. A minor collision in a Bentley or Porsche can become a major claim if a specialized sensor or aluminum panel must be flown in and sits at customs for weeks. These delays trigger extended rental reimbursement costs and customer dissatisfaction and they increase insurers’ losses.
The impact on premiums is measurable:
Markets such as Florida, California, and New York, where imported luxury cars are common, are already seeing elevated premiums due to a convergence of repair inflation, fraud, and accident rates. Tariff-related price inflation adds another pressure point, especially for vehicles requiring original parts with no domestic substitutes.
Final Thoughts
While tariffs are often discussed in the context of global trade or politics, they have tangible, real-world implications for UHNW individuals. A luxury home under construction, a board seat at a multinational firm, or a fleet of imported vehicles, all are increasingly vulnerable to the cascading effects of trade restrictions and inflation.
For clients with significant assets, the solution is not panic but preparedness. Regularly updating replacement cost valuations, reviewing policy terms, and coordinating with knowledgeable insurance advisors can help preserve coverage continuity and financial protection. In this evolving environment, proactive risk management and strategic insurance planning are more critical than ever.
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