Florida car insurance premiums could skyrocket due to Trump’s tariffs

Florida car owners already pay some of the highest premiums in the country. Last year’s storm threatened to raise prices even further.

Experts now warn that President Donald Trump’s tariffs could make the situation much worse.

In 2024, Floridians paid an average of $3,200 per year for car insurance, according to price comparison site Insurify. Without tariffs, the average annual premium would have risen to nearly $3,500.

A tariff tranche targeting steel and aluminum and foreign cars and car parts could potentially pay an average of $4,000 a year in 2026. This is an almost 25% increase.

Multiple factors determine your premiums – some personal, some macroeconomics. Insurance companies are the heaviest in their heaviest personal driving history, Brannon said. But what’s almost as important is the cost of repairs, and that’s where the Trump administration’s tariffs come into play.

In February, the Trump administration updated tariffs on steel and aluminum. Almost two-thirds of any car are made from these two materials, increasing the cost and price of producing automobiles and car parts, Brannon says.

Last week, customs duties came into effect on imported cars. According to the White House, about half of the cars purchased by Americans are manufactured abroad.

However, the most impact on insurance premiums is the 25% tariff on major car parts such as engines, transmissions and electrical components. Car owners step on bills for new vehicles, but it is often the insurance company that pays for repairs and car parts. Insurance companies easily hand over prices to consumers, Brannon said.

According to the White House, about a quarter of the materials in the US vehicles come from other countries.

Why is car insurance so expensive in Florida?

Three risk factors have inflated car insurance rates in Florida, Brannon said. Premium is expected to be the third highest in the country by 2026.

The first risk factor is a hurricane. Last year, an estimated 90,000 claims landed on insurance company desks from Hurricane Debbie, Helen and Milton, costing as many as $5 billion, Brannon said.

Florida also has a higher rate of litigation and insurance fraud, he said.

“When insurers are forced to cover such losses, they often look back and raise the premium to consumers,” Brannon said.

Auto insurance premiums have been rising sharply in recent years after soaking in the early days of the pandemic. The auto insurance industry revised its course as Americans returned to work and resported the roads. According to Insurify, the average rate rose 23% between 2022 and 2023.

This year was to mark a reprieve from the massive rate rises in recent years, Brannon said. Tariffs reduced the likelihood.

But analysts are also closely watching changes in courses from the Trump administration that could facilitate an increase in premiums, Brannon said. As is being done for goods from Canada and Mexico, stock market indexes slashed the crater last week, and then recovered rapidly since. amid uncertainty about whether authorities will withdraw the most devastating tariffs or create new exemptions.

Should I refrain from purchasing a new car?

All car owners will feel the impact of hiking on insurance rates, but those looking for a new or used car could face extra challenges.

Currently, full car duties could increase the price of new cars up to $2,000 to $6,000, Brannon said. Almost half of U.S. car sales could be affected, according to S&P Global, which tracks the automotive industry. These price increases could drive demand for used cars and raise costs for the sector, Brannon said.

According to The New York Times, car sales have skyrocketed a few weeks ago ahead of the tariff threat. And automakers are already beginning to cut their imports due to tariffs.

How about gas?

If there is one silver lining for global stock market fallout, then oil prices have plummeted to their first decline in four years amid a recession horror. The Trump administration said it wanted to keep energy prices low and cut off tariff exemptions for crude oil and liquid natural gas coming from other countries.

According to the AAA, Tampa Bay has seen slower increases in gas prices, primarily related to refinery maintenance and seasonal variation. The average price in Florida is currently close to $3.20 per gallon for regular fuel.

But if oil prices remain low, consumers can quickly see some relief on the pump, said Patrick de Haan, lead analyst at price tracking service Gasbuddy.

A crash in the stock market, as well as rising prices elsewhere, could lead to Americans having less money to spend on plane tickets and road trips, leading to reduced demand for gas, DeHan said. In the short term, that means gas is cheaper.

But in the long run, refineries will slow production, he said. Prices can rise as consumer demand bounces.

How about Port Tampa Bay?

Port Tampa Bay supplies nearly half of Florida’s fuel. Fortunately, most of that fuel comes from Texas nationally, spokesman Lisa Wolf Chason told the Tampa Bay Times in February.

Approximately one-third of the port’s cargo tonnage comes from foreign trade. According to Wolf-Chason, if foreign shipments are low, the port could lose revenue from fees paid by importers. However, most of the impact from the tariffs is felt by port tenants.

Tory Chamblis, who commands the Port Tampa Bay zone, has already said the port is demanding increased use, increased use of the foreign trade zone and the use of the foreign trade zone.

Companies will ultimately have to pay tariffs on imports, but foreign trade belts can avoid paying those tariffs at once, Chambliss said.

The port has two goals and Chambliss is to bring manufacturing back to US soil, helping foreign and domestic tenants survive. It is not realistic to remain cost-competitive while bringing all production back to America, he said.

“We’re trying to ease the impact as much as possible,” he said.