Tariff Increases Impact TIV
Is your client's building insured to rebuild — in part or in full — at today's cost?
A practical guide to reviewing tariff-related reconstruction costs and adjusting building values on an existing annual policy.
Adjustments are billed pro-rata, in both directions — so there's no premium penalty for getting ahead of the conversation.
Tariff-related changes in material costs can affect what it would cost to rebuild a property, in part or in full. For brokers, the first step is a conversation with your client about whether their building's insured value still reflects that cost.
Where an increase is appropriate as a result of the higher tariff rates on building materials, SPG Canada will endorse the existing policy to adjust the building's Total Insured Value (TIV). Should the tariff rate change and a decrease in TIV is requested, we will apply a pro-rata calculation basis to the amendment.
Why review building values now?
Canada's counter-tariff measures include selected construction materials. The effect on a rebuild depends on the materials involved, where they're sourced, and the property itself — a tariff percentage on one material isn't the same as an equivalent increase in a building's total reconstruction cost. [1]
Use the conversation to walk through the valuation date, construction type, and any recent replacement cost information. The real question isn't whether every client needs the same bump — it's whether the current building value still holds up.
Statistics Canada reported a 3.5% year-over-year rise in its non-residential building construction price index for the 15-CMA composite in Q2 2026. This predates the September tariff changes and isn't a measure of their impact, or a recommended TIV increase for any individual property. [2]
How the endorsement works
An adjustment to the annual policy
The endorsement increases the building's insured value within the existing policy. You and your SPG Canada underwriter work out the appropriate amount together.
A flexible, two-way adjustment
The increase applies for the rest of the current term and can be revisited any time. Premium is pro-rated for time remaining — and if the value later comes back down, a pro-rata return premium applies to the unused portion, subject to policy terms.
Review again as conditions change
Reconstruction costs can keep moving. Insureds can ask for a further adjustment up or down during the term — just bring the revised value and effective date to your underwriter.
From client conversation to policy adjustment
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Review the building’s exposure
Compare the current insured value against the latest replacement cost assessment. Think through construction type and the materials most likely to move reconstruction costs.
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Raise the gap with your client
Explain why the value might need a second look, and whether you need updated valuation information. An endorsement supports an appropriate value — it's not a substitute for a property-specific assessment.
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Bring it to your SPG Canada underwriter
Share the policy and property details, current TIV, valuation information, and your proposed adjustment. Your underwriter will confirm terms, premium, and effective date.
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Endorse, and revisit later if needed
Once you've agreed on the number, SPG Canada endorses the existing annual policy. If costs shift again down the road, just come back to the conversation.
Have these details ready for the discussion
- Policy number and property address
- Current building TIV
- Latest valuation and assessment date
- Construction type and relevant materials
- Reason for the adjustment
- Proposed value and effective date
Questions brokers may have
Is this only relevant to buildings under construction?
No. This is about the cost to reconstruct an insured building — including an existing one. Ask your SPG Canada property underwriter whether the endorsement fits the policy and risk.
Does every building need a 20% increase?
No. Any percentage you've seen used as an example isn't a standard recommendation. Start with a sound baseline valuation, think through the property's actual reconstruction costs, and land on the right number with your underwriter.
Can the insured value be reduced later?
Yes. Insureds can request a decrease during the term as circumstances change, with a pro-rata return premium on the unused portion, subject to policy terms.
Does a higher TIV remove every underinsurance concern?
No. It can help address potential underinsurance, but the building still needs an appropriate valuation — and policy wording, including any coinsurance provision, still applies.
Does this automatically change other property limits?
No. A building value review doesn't touch limits for contents, stock, equipment, or business interruption. Review those separately with your client and the relevant underwriter where needed.
This endorsement cannot be requested or added after a loss has occurred, or once a loss is known or suspected to have occurred. For insurance brokers. All requests are subject to underwriting review and the terms, conditions, limitations and exclusions of the applicable policy and approved endorsement. This article does not amend policy wording or confirm eligibility for an individual risk. Tariff measures and construction costs can change; use current information and a property-specific valuation.
Sources and context
- Department of Finance Canada: Complete list of U.S. products subject to counter-tariffs. Check current measures and product classifications.
- Statistics Canada: Building construction price indexes, second quarter 2026, released July 24, 2026. CMA means census metropolitan area.
