(The Center Square) – Tariffs could drive auto insurance rates up an additional 18% in Illinois after inflation provoked a similar increase in 2024, according to a new report by Insurify.
Insurify data journalist Matt Brannon said estimates could change depending on which tariffs are actually imposed. He said the report considered Mexico and Canada tariffs, steel and aluminum tariffs, and tariffs which are expected to take effect on cars and auto parts.
“Before any tariffs had been announced, we expected car insurance prices to go up 5% for the average driver. Now, with all of these three sets of tariffs applied by the end of the year, it would be 19% higher,” Brannon told The Center Square.
Brannon said with the tariffs in effect, the increase in Illinois would be 18% instead of 4%.
“Consumers are going to end up paying around $300 roughly more than they would have if these tariffs never went into effect,” Brannon said.
Last year in Illinois, car insurance rates jumped 18%, bringing the average annual full coverage cost to $1,963.
According to Insurify, drivers in neighboring states are paying less. At $1,654, Indiana auto premiums are 19% lower on average than rates in Illinois. Iowa, at $1,582, comes in 24% lower than Illinois and Missouri, despite a 29% surge last year, remains 12% lower.
The report suggests that higher auto insurance rates in Illinois may be driven by increased claims costs, repair expenses and industry-wide pricing adjustments. For residents, however, these rising costs come on top of some of the highest property taxes in the nation and an economy vulnerable to downturns due to the state’s heavy financial burdens.
President Donald Trump argued that tariffs would create jobs in the U.S. and help the nation’s economy.
The president announced at the White House last week that Hyundai would build a $5.8 billion steel plant in Louisiana.
“Hyundai will be producing steel in America and making its cars in America. As a result, they’ll not have to pay any tariffs. You know, there are no tariffs if you make your product in America,” Trump said.
The facility is expected to produce 2.7 million tons of steel for Hyundai auto plants in Alabama and Georgia, starting in 2029.
Brannon said tariffs will cause car insurance rates to rise between now and then.
“In the years in between, insurers still have to pay for the parts that haven’t yet been moved into the U.S., so they still face higher costs. They are able to turn around and show regulators, ‘Hey look, our costs have gone up,’” Brannon said.
Brannon added that U.S. auto parts producers not being tariffed might also raise prices as if they were being tariffed.
Steve Wilson contributed to this story.
