Trump Tariffs Drive Sharp Spike in Auto Insurance Costs

Newly implemented tariffs on imported auto parts and materials are increasing repair costs, pushing insurance premiums up by an estimated 19% in 2025.

• Tariffs on car parts, steel, and aluminum have significantly increased auto repair costs, adding $30 to $60 billion to insurance claim expenses this year.
• Insurance premiums are projected to rise by 19% in 2025, a sharp increase compared to the typical annual hike of 5%.
• Approximately 60% of U.S. replacement auto parts are imported, making the domestic market highly susceptible to tariff-driven cost increases.
• Steel and aluminum tariffs, with 50% of aluminum and 35% of steel imports coming from Mexico and Canada, further exacerbate repair and insurance costs.
• Insurance companies are preparing to explain to customers that these premium increases are directly tied to tariff-related cost pressures.

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