Recently, the prospect of imposing tariffs on imported vehicles and components has many insurers concerned. Several auto insurance groups have come together to contend that these tariffs will not only increase insurance rates, but will also lead to a significant increase in auto-repair costs and, yes, even car theft.
By imposing a tariff on imported cars, those cars, and the parts that go into those vehicles, become more expensive. As a result of the increase in value for the car and its parts, it naturally follows that those vehicles will become a juicer target for theft. It stands to reason that as a result of this, there will be a measurable increase in auto-theft for vehicles affected by these new tariffs.
As if that wasn’t enough bad news, if you continue to think about the impact of these tariffs, it quickly becomes apparent that an increase in theft and car costs, also means that insurance for those vehicles is going to skyrocket as well.
The U.S. Commerce Department by the American Insurance Association, National Association of Mutual Insurance Companies and Property Casualty Insurers Association of America made a joint statement about these new tariffs, saying that “The imposition of tariffs could likely lead to the filing of hundreds, if not thousands, of requests for rate increases by insurers with insurance regulators across all 50 states,”.
So, how will this all affect you? Well, according to Forbes, the Auto Care Association estimates that these tariffs will raise the average U.S. household’s auto insurance costs by approximately $700 per year.
Politics aside, if you drive a car in the United States these tariffs are something to keep an eye on. If they come to pass they will undoubtedly have a drastic impact on the U.S. auto-insurance industry.