Tariffs on auto parts impact insurance costs and repair claims

New research projects that the national average cost of car insurance could increase 7%. Here’s how insurance costs could rise in states by the end of 2025

Cambridge, Mass.—The U.S. has imposed several rounds of tariffs that raise the cost of auto parts, increasing the cost of repair claims for insurers. Recently announced trade deals place tariffs on imports of automobiles and auto parts from Japan, South Korea, and the European Union at 15%.

For context, Japan is the fourth-largest exporter of auto parts to the U.S., South Korea is the fifth, and Germany is the sixth. And inflation, which was falling early in the year, has increased since April, while extreme weather is also fueling high insurance premiums, from fires to flooding.

As a result, insurers are bracing for a rate increase. In an earnings call, Allstate CEO Tom Wilson said, “If we need to raise prices, we will raise prices just like we did in the pandemic because with our margins, we don’t have a lot of room to absorb [the cost].”

A new report from Insurify projects that the national average cost of full-coverage car insurance will increase 4% by year’s end ($2,402) and up to 7% ($2,472) if prolonged tariffs lead to significant insurer losses.

So what does that all mean? Insurify data scientists modeled how insurance costs could rise in each state by the end of 2025, using proprietary quote data, tariff projections and insurance industry losses. Here are some of the highlights from the Insurify’s research.

Key findings

• From December 2024 to December 2025, full-coverage car insurance rates are on track to rise 12% or more in Rhode Island, Michigan, Maine, Washington, D.C., and Delaware. If insurers need to impose tariff-related price increases, those states will see rates climb 15% or more.

• Most states saw premiums fall in the first half of 2025. The average full-coverage car insurance premium nationwide declined 1% over the past 12 months, with an annual cost of $2,310 as of June.

• Maryland has the most expensive average car insurance premiums in the U.S., at $4,093 per year, up 20% from summer 2024. New Hampshire has the cheapest premiums on average, at $993.

• Between mid-2025 and the end of the year, Insurify projects that four states will see prices remain flat or decline: Vermont, Maine, Hawaii and Rhode Island, unless tariffs lead to additional rate hikes.

• After Florida’s rates dropped 8% in the first half of the year, Insurify projects the state could reverse course, leaving Floridians to face the biggest cost increase between now and the end of the year, at 7%. That would push the state’s average from $2,912 to $3,107, assuming no additional tariff-related increases.

The 10 most expensive states for car insurance in 2025

1. Maryland

• Year-end annual cost projection, without tariffs: $4,235 (+4% year-over-year)
• Year-end annual cost projection, with tariffs: $4,358 (+7% year-over-year)
• Average annual cost (June 2025): $4,093
• Second half of 2025 projected cost increase: 3% without tariffs

2. New York

• Year-end annual cost projection, without tariffs: $3,935 (+4% year-over-year)
• Year-end annual cost projection, with tariffs: $4,047 (+7% year-over-year)
• Average annual cost (June 2025): $3,724
• Second half of 2025 projected cost increase: 6% without tariffs

3. Washington, D.C.

• Year-end annual cost projection, without tariffs: $3,848 (+13% year-over-year)
• Year-end annual cost projection, with tariffs: $3,961 (+16% year-over-year)
• Average annual cost (June 2025): $3,780
• Second half of 2025 projected cost increase: 2% without tariffs

4. Delaware

• Year-end annual cost projection, without tariffs: $3,465 (+12% year-over-year)
• Year-end annual cost projection, with tariffs: $3,566 (+15% year-over-year)
• Average annual cost (June 2025): $3,366
• Second half of 2025 projected cost increase: 3% without tariffs

5. South Carolina

• Year-end annual cost projection, without tariffs: $3,362 (-1% year-over-year)
• Year-end annual cost projection, with tariffs: $3,458 (+2% year-over-year)
• Average annual cost (June 2025): $3,202
• Second half of 2025 projected cost increase: 5% without tariffs

6. Rhode Island

• Year-end annual cost projection, without tariffs: $3,330 (+17% year-over-year)
• Year-end annual cost projection, with tariffs: $3,430 (+20% year-over-year)
• Average annual cost (June 2025): $3,331
• Second half of 2025 projected cost increase: 0% without tariffs

7. Nevada

• Year-end annual cost projection, without tariffs: $3,275 (+10% year-over-year)
• Year-end annual cost projection, with tariffs: $3,369 (+13% year-over-year)
• Average annual cost (June 2025): $3,159
• Second half of 2025 projected cost increase: 4% without tariffs

8. Michigan

• Year-end annual cost projection, without tariffs: $3,186 (+16% year-over-year)
• Year-end annual cost projection, with tariffs: $3,280 (+19% year-over-year)
• Average annual cost (June 2025): $3,131
• Second half of 2025 projected cost increase: 2% without tariffs

9. Georgia

• Year-end annual cost projection, without tariffs: $3,133 (+11% year-over-year)
• Year-end annual cost projection, with tariffs: $3,224 (+14% year-over-year)
• Average annual cost (June 2025): $3,025
• Second half of 2025 projected cost increase: 4% without tariffs

10. Florida

• Year-end annual cost projection, without tariffs: $3,107 (-1% year-over-year)
• Year-end annual cost projection, with tariffs: $3,194 (+2% year-over-year)
• Average annual cost (June 2025): $2,912
• Second half of 2025 projected cost increase: 7% without tariffs

The 10 cheapest states for car insurance in 2025

1. New Hampshire

• Year-end annual cost projection, without tariffs: $1,009 (+1% year-over-year)
• Year-end annual cost projection, with tariffs: $1,038 (+4% year-over-year)
• Average annual cost (June 2025): $993
• Second half of 2025 projected cost increase: 2% without tariffs

2. Wyoming

• Year-end annual cost projection, without tariffs: $1,244 (-14% year-over-year)
• Year-end annual cost projection, with tariffs: $1,279 (-11% year-over-year)
• Average annual cost (June 2025): $1,172
• Second half of 2025 projected cost increase: 6% without tariffs

3. North Dakota

• Year-end annual cost projection, without tariffs: $1,273 (+1% year-over-year)
• Year-end annual cost projection, with tariffs: $1,310 (+4% year-over-year)
• Average annual cost (June 2025): $1,237
• Second half of 2025 projected cost increase: 3% without tariffs

4. North Carolina

• Year-end annual cost projection, without tariffs: $1,301 (+3% year-over-year)
• Year-end annual cost projection, with tariffs: $1,339 (+6% year-over-year)
• Average annual cost (June 2025): $1,250
• Second half of 2025 projected cost increase: 4% without tariffs

5. Maine

• Year-end annual cost projection, without tariffs: $1,374 (+13% year-over-year)
• Year-end annual cost projection, with tariffs: $1,415 (+16% year-over-year)
• Average annual cost (June 2025): $1,370
• Second half of 2025 projected cost increase: 0% without tariffs

6. Idaho

• Year-end annual cost projection, without tariffs: $1,442 (-3% year-over-year)
• Year-end annual cost projection, with tariffs: $1,484 (+0% year-over-year)
• Average annual cost (June 2025): $1,400
• Second half of 2025 projected cost increase: 3% without tariffs

7. Ohio

• Year-end annual cost projection, without tariffs: $1,507 (+4% year-over-year)
• Year-end annual cost projection, with tariffs: $1,551 (+7% year-over-year)
• Average annual cost (June 2025): $1,472
• Second half of 2025 projected cost increase: 2% without tariffs

8. Iowa

• Year-end annual cost projection, without tariffs: $1,548 (-2% year-over-year)
• Year-end annual cost projection, with tariffs: $1,593 (+1% year-over-year)
• Average annual cost (June 2025): $1,485
• Second half of 2025 projected cost increase: 4% without tariffs

9. Hawaii

• Year-end annual cost projection, without tariffs: $1,634 (+9% year-over-year)
• Year-end annual cost projection, with tariffs: $1,683 (+12% year-over-year)
• Average annual cost (June 2025): $1,631
• Second half of 2025 projected cost increase: 0% without tariffs

10. Vermont

• Year-end annual cost projection, without tariffs: $1,646 (+5% year-over-year)
• Year-end annual cost projection, with tariffs: $1,695 (+8% year-over-year)
• Average annual cost (June 2025): $1,638
• Second half of 2025 projected cost increase: 0% without tariffs

States where insurance prices are increasing fastest in second half of 2025

1. Florida

• Second half of 2025 projected cost increase: 7% without tariffs
• Year-end annual cost projection, without tariffs: $3,107 (-1% year-over-year)
• Year-end annual cost projection, with tariffs: $3,194 (+2% year-over-year)
• Average annual cost (June 2025): $2,912

2. Wyoming

• Second half of 2025 projected cost increase: 6% without tariffs
• Year-end annual cost projection, without tariffs: $1,244 (-14% year-over-year)
• Year-end annual cost projection, with tariffs: $1,279 (-11% year-over-year)
• Average annual cost (June 2025): $1,172

3. Arkansas

• Second half of 2025 projected cost increase: 6% without tariffs
• Year-end annual cost projection, without tariffs: $2,221 (-8% year-over-year)
• Year-end annual cost projection, with tariffs: $2,283 (-5% year-over-year)
• Average annual cost (June 2025): $2,094

4. New York

• Second half of 2025 projected cost increase: 6% without tariffs
• Year-end annual cost projection, without tariffs: $3,935 (+4% year-over-year)
• Year-end annual cost projection, with tariffs: $4,047 (+7% year-over-year)
• Average annual cost (June 2025): $3,724

5. South Carolina

• Second half of 2025 projected cost increase: 5% without tariffs
• Year-end annual cost projection, without tariffs: $3,362 (-1% year-over-year)
• Year-end annual cost projection, with tariffs: $3,458 (+2% year-over-year)
• Average annual cost (June 2025): $3,202

6. Minnesota

• Second half of 2025 projected cost increase: 5% without tariffs
• Year-end annual cost projection, without tariffs: $2,455 (-2% year-over-year)
• Year-end annual cost projection, with tariffs: $2,526 (+1% year-over-year)
• Average annual cost (June 2025): $2,345

7. Utah

• Second half of 2025 projected cost increase: 5% without tariffs
• Year-end annual cost projection, without tariffs: $1,950 (-4% year-over-year)
• Year-end annual cost projection, with tariffs: $2,006 (-1% year-over-year)
• Average annual cost (June 2025): $1,865

8. Texas

• Second half of 2025 projected cost increase: 4% without tariffs
• Year-end annual cost projection, without tariffs: $2,790 (+3% year-over-year)
• Year-end annual cost projection, with tariffs: $2,870 (+6% year-over-year)
• Average annual cost (June 2025): $2,673

9. California

• Second half of 2025 projected cost increase: 4% without tariffs
• Year-end annual cost projection, without tariffs: $2,635 (+2% year-over-year)
• Year-end annual cost projection, with tariffs: $2,711 (+5% year-over-year)
• Average annual cost (June 2025): $2,525

10. Louisiana

• Second half of 2025 projected cost increase: 4% without tariffs
• Year-end annual cost projection, without tariffs: $2,795 (-1% year-over-year)
• Year-end annual cost projection, with tariffs: $2,876 (+2% year-over-year)
• Average annual cost (June 2025): $2,680

For the complete report from Insurify, click here.