Tariffs could drive up car insurance costs as rates already climb nationwide [View all]

Source: Scripps News

Posted 12:13 PM, Aug 26, 2025 and last updated 12:18 PM, Aug 26, 2025


Tariffs may not just affect what Americans buy in stores or online; they could also drive up the cost of car insurance. Gabby Olivas recently learned how expensive coverage has become. "I thought that it was really high, so I went window shopping for others and then I realized that was just the norm right now," Olivas said. "So yeah, that's a little scary, but it's also like, you know, gonna have to make it work."

Car insurance rates are up 5.3% from a year ago, according to the most recent federal inflation data. That averages out to $213 a month, NerdWallet reports.

Premiums could rise even more as tariffs continue to impact the auto industry. The national average for full-coverage car insurance is forecast to increase 7% by the end of the year if tariffs remain in place, compared with a projected 4% increase without them, according to Insurify.

"What car insurance does is essentially cover your, you know, the cost of your car, the costs of repairs, the cost to potentially replacing your car in the event of an accident," said Chase Gardner, data insights manager at Insurify. "And so if the cost of repairing your car due to more expensive car parts that have these foreign tariffs on them goes up, then insurance does have to ultimately rise to meet those increasing costs as well."

Read more: https://www.scrippsnews.com/life/money/tariffs-could-drive-up-car-insurance-costs-as-rates-already-climb-nationwide