US car insurance premiums are higher than those in other countries, GlobalData surveying has found. With the recent 25% tariffs imposed on all foreign-made automobiles, along with broader import duties introduced by President Donald Trump on 2 April 2025, the cost of vehicle ownership is expected to rise significantly. These changes are likely to place additional pressure on insurers to increase policy prices.

GlobalData’s 2024 Emerging Trends Insurance Consumer Survey reveals that 53.5% of US consumers pay over $1,000 annually for car insurance. In contrast, only 21.0% of UK consumers report paying more than £750 ($987) while just 16.9% of Chinese consumers state their premiums exceed 7,000 yuan ($963). Among all 11 countries included in the survey, none have a higher proportion of consumers paying $1,000 or more for car insurance than the US.

Meanwhile, on April 2, 2025, President Trump announced a comprehensive tariff plan, marking a significant shift in US trade policy. The plan includes a universal 10% tariff on most imports—with exemptions for Canada and Mexico—and higher, country-specific tariffs: 34% on Chinese goods and 20% on those from the European Union. Most notably, it introduced a 25% tariff on all foreign-made automobiles.

The 25% tariff on imported vehicles is expected to significantly increase car prices in the US.

Anderson Economic Group (AEG) suggests that even the lowest-cost American vehicles could see price increases of between $2,500 and $5,000, while imported models may experience hikes of up to $20,000. This escalation in vehicle prices is anticipated to have a knock-on effect on related sectors—particularly the motor insurance industry. Moreover, AEG cites that Trump’s 25% tariff on auto parts may cost American consumers more than $30bn in higher vehicle prices and reduced car sales in the first year.

As the cost of both purchasing and replacing vehicles rises, insurers are likely to adjust their pricing models to reflect the increased value at risk. Additionally, tariffs on imported auto parts are expected to drive up repair costs, further increasing the cost of claims. Insurify also forecasts that these combined pressures could push average annual motor insurance premiums from approximately $2,300 to over $2,750. In summary, the new tariffs introduced by the Trump administration—particularly those affecting imported vehicles—are expected to raise car prices, increase repair costs, and ultimately drive up insurance premiums. In response, insurers will need to revisit their underwriting strategies, refine pricing models to account for higher claims costs, and invest in technologies (such as telematics) to more accurately assess and manage risk.