Car insurance premiums, which have already risen sharply in recent years, could climb even higher due to tariffs.
The study projects that the average full-coverage policy could increase 7% to $2,472 a year by the end of 2025 if prolonged tariffs lead to insurer losses. Even without tariffs, drivers may still face a 4% rate hike in the second half of the year.
Some states, including Rhode Island, Michigan, Maine, and Delaware, could see increases of more than 12% by year-end.
This marks a shift from the first half of 2025, when rates remained steady nationwide and even fell in 27 states.
The recent rise in premiums is linked to tariffs on auto parts and inflation. These tariffs increase repair costs for insurers, which could be passed on to drivers.
“The U.S. has imposed several rounds of tariffs that raise the cost of auto parts, thus increasing the cost of repair claims for insurers,” Insurify noted. “[Insurers] could raise premiums to align their rates with this additional financial risk.”
Drivers have already seen insurance costs surge over 40% — around $700 — from June 2022 to June 2024, making the potential 2025 increases another challenge for households.
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