Why tariffs could drive up Floridians' auto insurance costs

• That's according to a new report from Insurify, which helps drivers compare quotes from multiple providers.

Catch up quick: Trump made a one-month exemption to his tariffs for the auto sector, which relies on the free movement of vehicles and parts across borders. That exception expires in April.

• Under the new tariff regime, levies will be added each time unfinished vehicles cross the border, creating layers of increased costs, Axios transportation correspondent Joann Muller wrote.
• Plus, new tariffs are coming soon on steel and aluminum, which will add to those higher costs.

The big picture: The cost of annual coverage in Florida is expected to reach $3,576 by the end of the year — up $410 (or 13%), with $92 of that increase attributable to tariffs, according to Insurify.

• From 2023 to 2024, the state saw a 9% average premium increase.

How it works: Insurify based its projection on estimates that 32% of U.S. auto parts come from Canada and Mexico, parts make up 60% of a repair bill and vehicle damage coverage accounts for 60% of full-coverage car insurance costs.

• Higher auto part prices mean higher repair costs, which means insurers will have to shell out more cash for claims and then pass those costs to consumers through higher premiums.

Yes, but: "It will take some time for that cost to work through the system," Andrew Whitman, professor of finance at the University of Minnesota, said in Insurify's report.

• "Insurance companies have to file for rate increases, and those rate increases have to be based on increased claim costs," he added.