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Yahoo
17-05-2025
- Automotive
- Yahoo
How tariffs could drive up your auto insurance costs
WICHITA, Kan. (KSNW) — The bill for your insurance premium could be affected in the coming months if more tariffs are implemented. KSN spoke with some insurance experts to understand how your premiums could see a spike. Tariffs and trade wars have the auto insurance industry in a wait-and-see position, bracing for the other shoe to fall. Butler County paramedic dies in the line of duty 'It's just a cyclical; it kind of rolls downhill and affects everything eventually,' said Paul McGuire, Account Executive at Conrade Insurance Group. That eventually could be your personal or business auto insurance, especially if you have an imported car or need repairs with car parts that are imported from various countries. McGuire said, 'If the price of importing a car goes up 25 percent, that means the value of that car is now 25 percent higher. So, you have to insure the car at a higher limit. So, if you have a total loss on that vehicle, insurance is paying out 25 percent more.' McGuire says that in this scenario, the only way for the insurance company to equal that cost rise is by raising the premiums, as they won't be able to pay out more claims without charging more. He also says inflation has already affected this industry in the last five years. 'That puts higher price on cars, higher price on parts and then higher price on service. And the labor, which is all tied into the claims,' said McGuire. Bob Passmore, the Department Vice President, Personal Lines at APCIA, said, 'Currently, we're thinking that all insurance claims costs could rise anywhere between $23 billion and $45 billion over a 12-month period.' This means billions of dollars are paid by auto insurers for vehicle repairs or claims. Passmore added, 'The number one driver of what we pay for auto insurance is the cost of those claims. And when the cost of those claims starts going up, then companies are going to have to be able to keep up.' He also gave some advice on how to keep your costs low with auto insurance. He said every few years, you should shop for the best deal. He also said, 'You can get quotes online, you can make a couple of phone calls, and you can sometimes save yourself quite a bit of money. You can also take a look at your coverages to make sure that you have the coverage that you need should you get into a crash.' The experts also told KSN that six out of ten auto parts that are used in repairs come from Mexico, Canada, and China — all countries the Trump administration is negotiating with. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
29-03-2025
- Automotive
- Yahoo
Tariffs could make cars more expensive, MN Commerce Dept. warns
The Brief The Minnesota Department of Commerce said federal tariffs could raise the price of vehicles. State officials also say tariffs would increase the costs of repairs and insurance claims. Tariffs on car parts from Canada, Mexico and China are expected to take effect in April 2025. ST. PAUL, Minn. (FOX 9) - Impending tariffs are expected to raise the cost of purchasing a vehicle, as well as repairs and insurance premiums, according to officials with the Minnesota Commerce Department. Big picture view A news release from the Minnesota Department of Commerce said tariffs on automotive parts from Canada, Mexico and China are set to go into effect in April 2025. Data from the American Property Casualty Insurance Association (APCIA) shows that nearly 60% of auto replacement parts come from these countries. READ MORE: Trump to unveil tariff plans on April 2: What to know This will also result in higher auto insurance premiums and repair costs, according to factors cited by the Insurance Federation of Minnesota. The APCIA adds that as auto insurance correlates with vehicle prices, insuring a car could become more expensive if insurance companies face higher claim payouts because of increased repair and replacement costs. The Minnesota Department of Commerces said consumers could face higher premiums when they renew their policies, which typically happens every six to 12 months. What they're saying Minnesota Department of Commerce Commissioner Grace Arnold released a statement saying, "U.S. tariffs, whether enacted or threatened, could increase the cost of maintaining and insuring your car. This is a man-made crisis that will make it more expensive for everyday Minnesotans to drive." Arnold continued by saying, "Minnesota's auto insurance market is competitive, allowing consumers to shop for lower premiums. However, insurance markets depend on stability and predictability to offer consumers comprehensive insurance at affordable prices. These tariffs will likely make it more expensive for Minnesotans to get to work, take their kids to childcare, and drive across our state." What you can do State officials say residents should stay informed about the developments and review their insurance policies. Minnesotans should also consider how possible increases in vehicle prices and insurance could impact their personal budgets. The Source Information for this article came from a news release sent by the Minnesota Department of Commerce based on information from the Insurance Federation of Minnesota and the American Property Casualty Insurance Association.
Yahoo
24-02-2025
- Automotive
- Yahoo
Trump tariffs won't just make imports pricier — car insurance costs will go up too
President Donald Trump suggested imposing tariffs on auto imports, threatening to drive up the cost of cars further amid plans for tariffs on steel, aluminum, Canada, and Mexico. But economists and the insurance industry say that this will raise auto insurance costs. Earlier this week, President Donald Trump said he was considering a 25% tariff on cars that would 'go very substantially higher over the course of a year,' but economists and the insurance industry warn they will drive up premiums. That's because insurance costs are impacted by the costs to replace damaged cars and parts, many of which are imported. 'If you raise the price of new cars, the price of second hand vehicles will go up because that's a direct substitute,' Paul Donovan, chief economist at UBS Global Wealth Management, told Fortune. 'And if you raise the price of new cars and second hand vehicles, the price of car insurance will also go up.' Insurance costs have been a major contributor to inflation, which has come down from highs but remains stubbornly above the Fed's 2% target. As of January, premiums have soared 55% since the start of 2020, according to the U.S. Bureau of Labor Statistics. They add to the already-high costs of buying a car. From January 2020 to January 2025, new and used cars prices have jumped 20% and 34%, respectively. Tariffs would exacerbate the situation, which would be worsened by more than auto duties. Trump also plans to implement a 25% tariff on aluminum and steel, key inputs for manufacturing cars. 'Producing vehicles has a lot of moving parts, and raising the price of what is among the most important components of the vehicle is only going to raise the price of an already expensive product,' Sam Fiorani, an analyst at AutoForecast Solutions, which studies the industry, told the Associated Press. In addition, Trump has also temporarily paused 25% tariffs on Mexico and Canada, with Canadian energy imports seeing a 10% levy. Most of the imported steel in the country comes from those two countries, which are also tightly integrated with the U.S. auto industry as part of its global supply chains. 'Now, you know, a product will go through 10-12 different countries before you get the final version of the product,' Donovan said. 'Famously, a car that is made in America will have components that cross the Mexican border 12 or 15 times before it ends up being a 'Made in America' car.' A report obtained by Fortune from the American Property Casualty Insurance Association (APCIA) said 60% of auto parts used in body shops are imported from Mexico, Canada, and China. While it remains unclear where and what type of tariff Trump will impose on the auto industry, any duties on imported parts could increase the costs of repairs, which are paid for by insurers who determine rates, Bob Passmore, department VP of personal lines at the APCIA, told Fortune. The APCIA estimates that the impact of tariffs on personal auto insurance will reach between $7 billion to $24 billion. The White House did not respond to a request for comment. At the end of the year, when insurance companies assess their margins, they need to make sure their premiums fit the bill of what the company pays in claims, which include damages, repairs, and medical expenses, Passmore said. But the consumers won't see an immediate impact. 'If the tariff goes on auto parts tomorrow, then you wouldn't see any kind of impact in your auto insurance bill probably for 12 to 18 months,' he said. This story was originally featured on
