Car Insurance Rates Up 7%: What Tariffs Mean for Your 2025 Premium

NEW YORK — Car  insurance premiums are on track to jump 7% by the end of 2025 if tariffs remain in effect, according to a new report from Insurify. that’s nearly double the 4% increase expected without tariffs, and it’s going to cost American drivers an average of $2,402 per year for full coverage./heading

Why Prices Are Climbing

Here’s the thing: tariffs don’t just hit manufacturers. They hit you. When imported auto parts cost more, repair shops pay more. And when repair costs go up, insurance companies pay out more on claims. That extra cost? It gets passed straight to your premium.

The Bureau of Labor Statistics reports that car insurance premiums have already jumped 55% since February 2020. Most of that spike happened between 2022 and 2024. And now? We’re looking at another increase.

“There is some evidence that tariffs have contributed to higher repair costs,” says Carrie Brannon, chief data scientist at Insurify. The report found that if tariffs remain, rates could increase by 7% by December, compared to just 4% without them.

What Does This mean for You?

So what does this mean for your wallet? If you’re paying for full coverage, you’re looking at around $200 a month by year’s end. that’s $2,402 annually — up from about $2,245 just six months ago.

But wait. There’s more to the story. Tariffs aren’t the only factor. Accident frequency, extreme weather, and inflation are all playing a role. In North Carolina, for example, rates could hit $1,339 per year with tariffs, compared to $1,261 without them. That’s a 6% jump versus 3%.Bottom Line

Look, car insurance isn’t getting cheaper anytime soon. With tariffs potentially adding 3% more to your rate hike, now’s a good time to shop around. Compare quotes from different providers. Ask about discounts. And if you’re driving a car that’s prone to expensive repairs? Consider coverage changes.

For more info on car insurance rates and coverage options, check out your state’s Department of Insurance website. Or visit Insurify.com for comparison shopping tools.