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Tariffs can push up car insurance through higher repair costs
Since the Trump administration tariffs took effect, the average suggested retail price of a car has risen 10.4%, raising insurer claim costs over time.
Tariffs do not apply directly to car insurance, but they can increase premiums by lifting the prices of items used in claims, including auto parts and materials such as steel and aluminum, Yahoo Finance reports.
As tariff related costs filter through to auto dealers and consumers, the average suggested retail price of a car has increased 10.4% since the tariffs were enacted. That higher vehicle and parts pricing makes it more expensive to repair or replace vehicles after accidents, theft, or other covered losses, which can raise what insurers pay on claims.
J.D. Power data and analytics quoted in the article links premiums to the cost of paying claims, noting that as claim costs rise or fall, premiums typically follow. The piece also says insurers, repair shops, and auto manufacturers are still working to assess how much tariffs have directly affected repair and replacement expenses, because tariffs are only one contributor.
The article further cites an April 2026 warning from the American Academy of Actuaries that tariffs on imported vehicles and auto parts could increase insurers claim costs, potentially pushing up car insurance rates, alongside other pressures like rising labor costs, supply chain challenges, and more advanced vehicle technology.