This is why Trump’s tariffs can raise car insurance premiums

Trump administration Tariff rules According to the new Analysis, Insurify can raise insurance premiums for drivers, while the costs are already increasing.

25% tariff Imports from Canada and Mexico – which can come into force As soon as March -The largest annual insurance premiums would be full by 8% to USD 2,52, by the end of 2025, according to Insurify, the insurance comparative shopping parties.

The analysis estimates that without tariffs in Canada and Mexico, average annual contributions would increase by 5% at the end of the year, to USD 2,435.

Tariffs are expected to produce cars and car parts imported from Canada and Mexico – which are the main suppliers of the American market – more expensive. As a result, insurers pay more money in claims when the policyholders enter into car accidents, and go to financial risk to consumers through higher contributions.

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“When people think about tariffs, they usually think about goods that can get from another place,” said Matt Brannon, data journalist at Insurify, who is the author analysis. “We don’t think about services such as car insurance many times.”

He called estimates of influence on the “conservative” tariff.

Asset applied 10% of an additional tariff On all imports from China, starting from February 4. In the meantime, the tariffs in Canada and Mexico also entered into force that day before the White House delayed them by a month.

About 6 out of 10 partial spare parts used in American car shops They are imported From Mexico, Canada and China, according to the American Property Casualty Insurance Association. Some car components Cross the border many times before the final assembly.

Trump too Signed a sweeping plan In the case of retaliation tariffs on global trading partners, after the review at the beginning of April. He I signed the order increase the obligations in the scope of aluminum and steel to 25%, Up with 10%AND called up to 25% of the tariff on cars, pharmaceuticals and semiconductors.

Economists said that they do not necessarily expect all tariffs to come into force and that Trump can rule them to extract concessions from trading partners.

“However, the use of tariffs as a negotiating tool does not mean any imposing tariffs,” economists Bank of America were written on Friday in a research note. These experts said they did not predict that the Canada or Mexico tariff will pass.

Experts say that if the tariffs come into force, the costs of cars, parts and insurance premiums would probably be exacerbated.

“Threats 25% of tariffs to the borders of North America – proposed, now delayed – will disturb over three decades of free trade in North America and rattle in every corner of the car, while the proposed” mutual “tariffs would increase further price pressure, the automotive industry is already in face of Problems related to price affordability, “Cox Automotive wrote in the latest comment.

According to the American consumer price index, Bureau of Labour Statistics, vehicle insurance premiums increased by 12%.

Brannon said that the costs of car insurance began to grow quickly in 2022 and 2023, when the Americans who worked at home during Covid pandemic began to work to work more often.

“Many more people hit the road at the same time, which led to more accidents,” he said.