Trump's tariffs on car imports may raise auto insurance premiums for motorists

From CNBC: 2025-02-24 08:11:02

The Trump administration’s tariff policies could raise auto insurance premiums for motorists, as costs soar amid pandemic-era inflation. A 25% tariff on imports from Canada and Mexico would increase annual full-coverage car insurance premiums by 8% to $2,502 by the end of 2025, according to Insurify.

Tariffs on cars and auto parts from Canada and Mexico would make them more expensive, leading to higher premiums for consumers. Insurance payouts rise when policyholders get into car accidents, passing on that financial risk to drivers. Premiums could increase by 5%, reaching $2,435 annually without tariffs.

Trump has proposed tariffs on China, Canada, and Mexico, with the aim of raising duties on aluminum, steel, and even automobiles. However, economists expect not all tariffs to take effect, viewing them as negotiation tools. The uncertainty could further impact the already soaring costs of cars, parts, and insurance premiums.

Read more: Here’s why Trump tariffs may raise your car insurance premiums