If you thought your car insurance was already expensive, brace yourself – prices are expected to rise even more, and it’s partly down to Donald Trump.
A new report from insurance giant Swiss Re says Trump’s trade tariffs are pushing up the cost of car parts, making repairs more expensive. That extra cost? It’s likely to land on your insurance bill.
This comes at a time when everything from water bills to council tax and broadband prices are already climbing – all of which jumped in April. So, another hit to your bank balance probably isn’t what you needed.
The cost of car insurance already shot up after COVID. During lockdown, insurers cut prices because people weren’t driving as much and claims were low. But as life returned to normal, prices surged back – and fast. By 2023, drivers in the UK clocked up 331 billion miles, pretty much back to pre-pandemic levels.
Now, with the global supply chain still shaky and car parts harder (and pricier) to get, insurers are struggling. Swiss Re says Trump’s trade war could make things worse – more tariffs mean more delays and rising repair costs, and that means higher premiums for you.
If you’re part of a household with more than one car, or you're already feeling the pinch, this isn’t good news.
Even with inflation falling and a short-term dip in claim costs, Swiss Re warns 2025 could be tough for UK insurers. And when insurers struggle, drivers end up footing the bill.
On top of that, there’s the Insurance Premium Tax (IPT) – something most people don’t even realise they’re paying. It’s a hidden extra that now adds 12% to your motor insurance and 20% to breakdown cover. One industry boss reckons the average person with home and car insurance pays over £100 a year in IPT alone.
Last year, insurers paid out a record £11.7 billion in claims. With theft and repair costs still on the rise, average premiums jumped 15% to £622 – after already climbing 25% in 2023.
In short: it’s getting harder and more expensive to stay on the road. And decisions made across the Atlantic are hitting your wallet here in the UK.
