20% of all passenger cars and trucks sold in the U.S. market hail from Mexico or Canada. On top of that, more than 30% of car parts used in these vehicles also come from those countries…without alternative suppliers elsewhere. Considering this, insurance experts warn that the Trump administration’s proposed tariffs could quickly snowball into higher car insurance premiums for American motorists. Here’s why.

A team of data scientists with Insurify determined that tariffs could bump the expected average cost of car insurance in the U.S. by 8% in 2025. Without tariffs, the analysts say that the projection dips to a 5% increase.

In other words, Mexico and Canada tariffs could speed up car insurance rate increases by 60%.

Increased vehicle prices and replacement car part costs can easily affect premiums, analysts say. This is because vehicles will get more expensive to import, thereby assuming MSRPs will increase, too. 

Moreover, with so many automotive parts produced in Mexico or Canada without alternative suppliers, fixing collision repair claims could also get pricier.

For example, Audi, Ford, Mazda, and Nissan all produce several models in Mexico. More than half of the cars’ OEM parts are also made in Mexico.

As such, the costs associated with insurance total loss claims and collision repairs would simply trickle down to U.S. drivers.

According to the Insurify analysis, new car MSRPs could increase by around $3,000.

In New York, motorists might expect an annual insurance premium increase of about $489, with $110 of that bump associated with the tariffs.