Just as the cost of car insurance had started to stabilize after post-pandemic rate increases, trade tariffs threaten to drive them back up, according to an Insurify forecast.

The insurance comparison-shopping website expects the average cost of full coverage to rise 4% on a nationwide basis by the end of the year and by 7% if tariffs significantly dent insurers’ bottom lines.

The impact, added to overall inflation costs consumers are facing, would be layered on top of a more than 40% average annual insurance cost increase from 2022 to 2024 as driving normalized after the pandemic, which inflated auto parts costs, Insurify said.

The insurance inflation started to plateau midyear last year, and more than half of states’ rates actually fell in the first half of this year, but U.S. trade tariffs have again raised auto parts prices due to the duties on foreign-sourced materials.

In addition, severe weather, including wildfires and hurricanes, are adding to insurance costs. January fires in Los Angeles destroyed up to 6,300 vehicles, Insurify said, and 2024 Florida hurricane damage brought over 100,000 in auto insurance claims.

A 4% increase in the average national full-coverage insurance cost would amount to a $2,402 annual premium, while a 7% increase would bring the total to $2,472.

“The size of that increase will depend in part on the extent to which tariffs influence premiums,” the report said.

Insurers achieved more rate increases than cuts in the first half of the year, adding to the outlook for average premium hikes, Insurify reported.

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