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Trump administration Tariff Policy According to the new insurance analysis, car insurance premiums can be increased for drivers. While the driver continues to see Fees soar In inflation during pandemic times.
25% tariff Imported from Canada and Mexico – May take effect March – By the end of 2025, the average annual full coverage car insurance premium will be increased by 8% to $2,502, according to the magistrate.
It estimates that the average annual premium will increase by 5% to $2,435 without tariffs on Canada and Mexico.
Tariffs are expected to make imported cars and auto parts from Canada and Mexico, a major supplier to the U.S. market, more expensive. As a result, when policyholders get stuck in a car accident, insurers pay more money in the claim, and they transfer this financial risk to consumers through higher premiums.
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“When people think about tariffs, they usually think about the goods they might get from elsewhere,” said Matt Brannon, a data reporter for Issurify. analyze. “A lot of times, we don’t consider services like auto insurance.”
He called the estimates of the tariff impact “conservative”.
Trump’s tariff proposals so far
In its first month in office, the Trump administration proposed several tariffs.
trump card A 10% tax rate is imposed Starting from February 4, all imports from China are imported. Comprehensive tariffs in Canada and Mexico will also come into effect before the White House is postponed by a month.
About six of the 10 automatic replacement parts used in repairs in U.S. auto shops Being imported According to the American Property Insurance Association, it comes from Mexico, Canada and China. Some automotive components Cross the border several times Before final assembly.
Trump is also Signed a detailed plan Retaliatory tariffs on global trading partners after the review that will be completed in early April. he Sign an order Increase the responsibility of aluminum and steel to 25%, From 10%and Requires 25% tariff About automobiles, drugs and semiconductors.
Economists do not necessarily expect all taxes to take effect. They say Trump may be using them as a tool to extract concessions from trading partners.
“However, using tariffs as a negotiation tool does not mean no tariffs are imposed,” U.S. securities economists wrote in a research note on Friday. These experts expect tariffs in Canada or Mexico will reach.
However, if they do, they could exacerbate premiums that have soared for cars, parts and insurance premiums.
“The threat of 25% tariffs on the North American border (now delayed) will undermine three decades of free trade throughout North America and rattle every corner of the automotive business, while the proposed “countdown” tariffs will increase price pressure, Increased price pressure Cox Automotive has faced affordability issues in a recent automotive industry Comment.
Auto insurance premiums have risen 12% over the past year, according to the Consumer Price Index.
In 2022 and 2023, insurance costs began to rise rapidly as Americans work less frequently and work more frequently, Brannon said.
“More people are on the road at the same time, which leads to more accidents,” he said.
