Arkansas could see sharp jump in car insurance rates

Axios

7 hours ago

Car insurance rates could rise more by the end of the year with tariffs than without them, and Arkansas could be one of the most affected states, a new projection finds.
Why it matters: The analysis shows one more way that Americans pay for higher tariffs.
Driving the news: The nationwide average annual cost of full-coverage car insurance could rise by 7% between June and December if tariffs stay in effect, compared to 4% otherwise, per a new report from insurance-comparison platform Insurify.
In raw terms, the average cost could hit $2,472 with tariffs, compared to $2,402 without them.
That's based on the tariff picture as of Aug. 1, reflecting the Trump administration's recently lowered rates on cars and auto parts from Japan, South Korea and Europe.
Zoom in: Arkansas could see a 9% increase with tariffs or a 6.1% increase without by year's end.
Several states with relatively large expected increases for the rest of the year recently saw costs dip, giving them more room for growth.
Between the lines: Tariffs affect insurance rates by increasing the costs of imported parts needed for repairs.
Inflation, accident frequency, and claims due to extreme weather also impact rates, among other factors.
What they're saying: "Initially, car insurance companies looked at 2025 as a year to keep insurance rates stable, or even cut them," per Insurify's report.
"Tariffs and inflation could derail that trend."
Claims volume could also fall, and insurance regulators could fight price hikes.
How it works: Insurify's projections are based on over 97 million rates from the insurance companies it works with, and reflect median costs for drivers age 20-70 with clean records and at least average credit.