Texas drivers could see their auto insurance rates increase by more than $3,000 as tariffs drive costs higher, according to a new analysis.
Texans were already expected to see a 6% increase by the end of 2025 over last year’s rates, but tariffs could push annual premiums to more than $3,000 as tariffs drive up global costs, according to projections by Insurify.
Though most of the Trump administration’s so-called “reciprocal tariffs” have been paused for 90 days, the 25% tariff on automotive imports, 25% steel and aluminum tariffs and tariffs on close trade partners Canada and Mexico remain in place.
Analysts say that will drive up car values and the cost of repairs — two considerations that have an outsize impact on auto insurance rates.
Breaking News Get the latest breaking news from North Texas and beyond. SIGN UP Or with: Google Facebook By signing up you agree to our Terms of Service and Privacy Policy
“Anything that affects the cost of the stuff that auto insurance pays for — so that’s medical care, that’s car vehicle repairs … is going to have some sort of an impact,” said Robert Passmore, assistant vice president of the American Property Casual Insurance Association.
Advertisement
“We are just coming off a pretty extraordinary period of inflation that had a huge impact on auto insurance premiums over the last couple of years, and … companies had to implement a lot of rate increases to catch up to the losses,” Passmore said.
“We’re just getting to the point where companies were starting to actually decrease the rates and now we have the the whole tariff situation.”
Texas has higher rates than some other states due to climate-related threats like wildfires and hurricanes, according to Matt Brannon, a data journalist at Insurify.
Advertisement
For Dallas-Fort Worth drivers, the metro area can also lead to slightly steeper premiums than rural parts of the state thanks to increased congestion and auto theft risks.
Advertisement
As for when Texans will notice the increase, it will likely be the end of 2025, or the beginning of next year before premiums start rising. Insurers often have to gather several months of data to show regulators that a hike is justified, Brannon said.
The Texas Department of Insurance doesn’t approve or deny rate hikes, according to an agency spokesperson, so an insurer can use their new rate as soon as they file it.
Advertisement
But the agency does review rate filings to make sure they comply with the law, which says rates must not be “excessive” and should be based on good actuarial principles.
Individual policy holders won’t have to worry about premium increases until their policy expires since insurers can’t raise rates until then.
Broader economic disruptions could also extend rate hikes to home and business insurance, according to the Insurance Information Institute.
Basics like comparing insurers, good driving discount programs, increasing your deductible and driving less can still help drivers get the best rates, Brannon and Passmore said.
Advertisement
“Even though all insurers we expect to be impacted by this, different insurers are in different positions financially and some of them may try to navigate this by raising rates to a lesser extent than others are just to try and win more customers,” Brannon said.
“So that’s one reason why comparing could still be a good option.”
There’s still plenty of uncertainty as tariff policies remain in flux, and more changes to how duties are implemented could change projections.
“There’s still a long way to go to see how this is all going to play out,” Passmore said.
Tariffs could drive up auto insurance rates by thousands for Texas drivers
