Tariffs could make your car insurance more expensive

Driving the news: The nationwide average annual cost of full-coverage car insurance could rise by 7% between June and December if tariffs stay in effect, compared to 4% otherwise, per a new report from insurance-comparison platform Insurify.

• In raw terms, the average cost could hit $2,472 with tariffs, compared to $2,402 without them.
• That's based on the tariff picture as of Aug. 1, reflecting the Trump administration's recently lowered rates on cars and auto parts from Japan, South Korea and Europe.

Zoom in: Some states, like Florida (+9.7% with tariffs, +6.7% without), Wyoming (+9.1% with, +6.1% without), and Arkansas (+9% with, +6.1% without) could see especially notable increases by year's end.

• Several states with relatively large expected increases for the rest of the year recently saw costs dip, giving them more room for growth.

Between the lines: Tariffs affect insurance rates by increasing the costs of imported parts needed for repairs.

• Inflation, accident frequency, and claims due to extreme weather also impact rates, among other factors.

What they're saying: "Initially, car insurance companies looked at 2025 as a year to keep insurance rates stable, or even cut them," per Insurify's report.

• "Tariffs and inflation could derail that trend."

Caveat: Premiums may fluctuate as the fast-changing tariff landscape continues shifting, or if tariffs prove "less burdensome than expected," Insurify notes.

• Claims volume could also fall, and insurance regulators could fight price hikes.

How it works: Insurify's projections are based on over 97 million rates from the insurance companies it works with, and reflect median costs for drivers age 20-70 with clean records and at least average credit.

The bottom line: It's shaping up to be a good year to shop around for the best car insurance rates you can find.