Car insurance premiums, which have already seen significant increases in recent years, may rise further due to tariffs imposed under President Donald Trump’s administration. According to a new analysis from Insurify, full-coverage car insurance premiums could increase by as much as 7%, bringing the average annual cost to $2,472 by the end of 2025.
Even without tariffs, drivers can expect a 4% rate increase in the second half of the year. In states such as Rhode Island, Michigan, Maine, and Delaware, premiums could rise by more than 12% by year-end.
These projections represent a sharp contrast to the first half of 2025, when car insurance rates held steady nationwide and even saw decreases in 27 states. However, the recent tariffs on auto parts and rising inflation are threatening to undo this positive trend.
Insurify explained that the tariffs, which increase the cost of auto parts, are raising repair claim costs for insurers. In response, insurers may need to raise premiums to align their rates with the increased financial risk.
This would further burden drivers, who have already experienced a 40% rise in their annual premiums — roughly $700 — from June 2022 to June 2024.
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