These days, it seems like wherever you turn you can’t escape the talk about tariffs. Tariffs affect many of the new products being made, and are having a significant impact on today’s financial markets. While there is lots of uncertainty around this subject, one aspect that is especially talked about is the automobile industry. With tariffs being enacted to promote more American auto manufacturing, most car makers are left with extra costs, and the decision to absorb them or pass them on to the consumer. But even if cars become more expensive, will the cost to insure them go up too? Let’s dig into how tariffs will impact car insurance.
Tariffs Will Raise Replacement Cost
If you are involved in an accident with another vehicle, you will be covered under collision insurance. If the crash is extreme enough, your car may end up totaled. This happens when the sum of the cost to repair your vehicle and the vehicle’s salvage value are greater than the total value of the car before the accident. If your car is totaled, you will be paid the market value of the vehicle, accounting for mileage, year, and previous damage.
With the prices of used vehicles increasing due to the tariffs, your car’s worth may hold, or even go up with time. With this being the case, your insurance company may pay more in the event that your car is totaled. However, the rising costs might also cause your insurance company to raise your premium or deductibles. You might get a bigger check for your vehicle, but you also could end up writing bigger checks yourself to adjust for the rising costs. With the uncertainty around vehicle prices, consider renewing your coverage sooner rather than later to lock in your premium and deductible prices before they get raised.
Tariffs’ Effect On Cost Of Repairs
In the event of a car accident, or even other damages covered under comprehensive coverage like weather damage or hitting a deer, your car might not have to be totaled. If the damage is contained to mostly one area or is mainly cosmetic, your car might be good as new after some time in the repair shop. However, tariffs are even affecting car repairs. Just like with cars being built in different countries being more expensive, foreign-made car parts are getting expensive too. Higher parts costs will likely end up making your overall repair bill more expensive. While this means that the insurance company will shell out more money to cover these repairs, just like with the cost of replacement, it can cause your insurance rates to go up, regardless of whether you were at fault for the damage or not.
Don’t Fear The Uncertainty, Choose Coverage From Strickler
While the long-term effects of tariffs can’t be told yet, Strickler’s commitment to quality and affordable car insurance is clear. If you want service that won’t waver and a team you can trust, contact Strickler Insurance for reliable auto insurance options. We can’t wait to hear from you!
