One Third of Drivers Cut Down on Car Insurance, Expecting Tariffs to Raise Premiums

Drivers are cutting back on car insurance coverage as they brace for tariffs to drive up premiums.

Car insurance prices have increased by almost 67% over the past five years, according to the latest CPI data, as COVID-19-related supply chain interruptions made car repairs more expensive. Three-quarters of American drivers surveyed in April by car insurance comparison app Jerry, said policies are unaffordable. Additionally, 85% of these drivers said they cut spending on groceries and other non-essentials to afford its rising costs.

President Donald Trump’s tariffs on steel and aluminum, and a 25% tariff on imported cars, are expected to further increase the cost of car repairs and rentals. The annual cost of insurance will climb an average of $92 due to tariffs, according to Insurify, a price comparison company.

More than a third of drivers say they chose a higher deductible to lower monthly payments, while another third said they reduced their coverage to make it more affordable. Those percentages are both up compared to previous surveys by Jerry.

However, many drivers who opted for cheaper plans no longer have the protection they need.

In Jerry’s April survey, over a third of drivers who opted for a higher deductible said they couldn’t afford it if they needed a repair or got into an accident today. Additionally, three-fourths of drivers who bought less coverage said they now don’t have the protection they think they need.