From Yahoo Finance: 2025-04-11 17:02:00

President Trump’s tariffs on fully assembled foreign vehicles and auto parts could lead to higher car insurance rates. The 25% tariff on cars and upcoming tariffs on auto parts will increase repair and replacement costs, prompting insurers to raise rates.

The increase in repair costs due to tariffs could result in more total loss claims rather than repairs. This may lead to higher costs for rental reimbursement coverage and longer repair times. Consumers with rental reimbursement coverage may have to pay more out of pocket if the repair delay exceeds the coverage limit.

Consumers may not see an immediate impact on their car insurance bills, as changes in premiums can take 12 to 18 months to reflect tariff effects. Insurers typically require months of data before adjusting rates, and some states have approval processes that further delay rate changes.

To mitigate potential premium increases, consumers can maintain necessary coverage, set a higher deductible, and explore available discounts. It’s important to regularly review coverage needs, compare quotes, and work with an independent agent to ensure the best deal on car insurance.

Read more: Why tariffs are expected to increase car insurance costs