New 25% tariffs on goods imported from both Mexico and Canada are poised to go into effect March 4 could have wide-reaching economic impacts—including insurance.
Insurance companies are fleeing California due to a rise in inflation and natural disasters, leaving people who are still insured feeling it in their pockets.
“It's going up right now," San Luis Obispo County resident Ed Naretto said. " You don't have a choice. You have to pay it.”
Auto insurance policies are no different. According to insurance comparison shopping website Insurify, in California insurance costs more.
“California does often pay more for car insurance and home insurance and that's because insurers often suffer more losses in California,” Insurify data journalist Matt Brannon explained.
Just in the last year, Naretto has seen his auto insurance premium skyrocket.
“It's gone up about $300 or $400 a year,” he said.
But with new tariffs coming down, Brannon thinks the already increasing rates will go up even more since those tariffs will increase the cost of car parts by 25%..
“If there are 25% tariffs on Canada and Mexico, the next time someone hits your car and damages your bumper, it might cost insurance companies 25% more to replace that bumper than it did before tariffs took effect and insurance companies pass that cost on to their consumers through higher premiums," Brannon explained.
According to Brannon, the average Californian with full coverage car insurance pays about 2,600 dollars a year. With tariffs they predict that will rise to about 2,800 dollars a year.
In total, he said that prices are estimated to go on average $232 from the end of 2024 to the end of 2025 with it varying from person to person. One person told KSBY that he's seen it go up $200 every six months over the last year.
If you’re looking for ways to possibly lower your rates - there are different usage-based insurance systems like Progressive Snapshot, Progressive's Snapshot, Allstate's Drivewise, Farmers' Signal, and Nationwide's SmartRide that base rates on your everyday driving.
