We’re all used to hearing about tariffs in the context of trade wars and political debates — but what if those big economic moves started hitting closer to home? For example, your car insurance or even your homeowner’s policy?
With President Donald Trump's new round of tariffs, raising prices up to 10% on a wide range of imported goods, there’s more at stake than just international trade. These changes could ripple through everyday life, impacting the price you pay to insure your car or home.
Trump has put fresh tariffs in place as part of a push to bring more manufacturing back to the U.S. The idea is to make imported goods more expensive, so companies are encouraged to produce things here. But the flip side is this: higher prices on materials we still import—things like steel, aluminum, microchips, and lumber.
All of these materials play a major role in construction, home repairs, and car manufacturing. And that’s where your insurance comes in.
Cars today are packed with imported tech. From sensors to computer chips. If tariffs raise the price of those parts, it’s going to cost more to repair a car after an accident. And when repair costs go up, insurance premiums usually follow.
“The primary driver of what we all pay for auto insurance is the cost of the claims. So, to the degree that tariffs increase the cost of anything … such as … auto replacement parts, repair costs … that will increase loss costs and create upward pressure on insurance premiums,” said Bob Passmore, vice president of personal lines at the American Property Casualty Insurance Association (APCIA) (1).
Insurers calculate your rate based (in part) on how expensive it would be to fix your vehicle. Newer cars loaded with high-tech features could see a bigger bump in premiums if tariffs hit these parts hard.
It’s not just your car. If you’re a homeowner, your insurance might be affected too.
Building materials like lumber and metal, which are often imported, could also get pricier under new tariffs. That means it would cost more to rebuild or repair a home, especially after a storm or other damage. In areas already struggling with rising costs and labor shortages, this could drive insurance premiums even higher. LendingTree analyzed home insurance rates in each state from 2019 to 2024 and found that rates rose 11.4 percent last year, the highest figure among years in the studied period (2).
Even beyond materials, tariffs can stir up broader economic effects. Higher costs can lead to more inflation and increased interest rates, making everything feel a little tighter. Insurers tend to play it safe when the economy looks shaky, and that could mean more conservative pricing on policies.
Plus, economic stress is often tied to higher claims. Think theft, vandalism, or even fraud. All of this adds up to a greater risk for insurance companies and potentially higher costs for consumers.
While we don’t know exactly how these tariffs will play out yet, it’s a good idea to take a few steps now:
It may not seem like global trade policy and your insurance bill are connected but they are. Tariffs don’t just hit manufacturers; they can hit your monthly budget, too.
That’s why we’re here. At BenefitHub, we help you stay ahead of these changes so you can make smarter money moves. Keep checking in for updates. We’ll help you stay in the know without needing an economics degree.
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