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RICHMOND, Virginia - After wreaking havoc on the homeowners' insurance market in the United States and beyond in recent years, climate change is coming for your car insurance premium.

After a flat first half of 2025 that even saw some reductions in rates, the average premium is , and potentially more, by the end of the year, according to a study released on Tuesday by Insurify, the online insurance comparison site.

Along with U.S. President Donald Trump's tariff agenda, which has upended global markets and angered traditional U.S. allies, extreme weather events and the changing climate are now a major factor in the availability and pricing of car insurance.

Here's what to know:

How much will car insurance rates change in 2025?

The U.S. national average cost of full-coverage car insurance is projected to increase by 4% to $2,402, and potentially more if tariffs lead to more insurer losses, according to the Insurify report.

That would be a shift from mid-2024 or so, when national rates had started levelling off after a post-pandemic surge of driving and rate increases.

From June 2022 to June 2024, the average annual cost of insurance in the United States rose by more than 40%, upward of $700, the report found.

How could climate change affect your car insurance rates?

Though not to the same extent as home insurance, severe weather definitely does affect auto insurance rates, said Matt Brannon, the author of the report.

"Hail storms, hurricanes, floods, winter storms – all of them can cause widespread vehicle damage and accidents," Brannon told Context.

"Insurers are always dealing with claims, but it's a lot of claims that are unusually expensive all at once, so they present a lot of risk to insurers – more so than the day-to-day sort of losses they face from collisions," he said.

How are recent extreme weather events connected to auto insurance?

The deadly Los Angeles County fires in January destroyed as many as 6,300 vehicles, according to estimates, while in 2024, Florida hurricanes led to more than 100,000 auto insurance claims, according to the Insurify report.

Hail, which is prevalent in the Midwest, accounts for about 12% of comprehensive car insurance claims, the report found.

What other factors are involved in the projected increases?

If tariffs do not affect rates further, the report projected that rates would rise, on average, by 4% by the end of 2025, after the average cost of car insurance had actually declined in most states in the first half of the year.

But if insurers still need to account for tariffs in rate setting, that increase could increase to 7%, with insurers that cover repair claims paying more to replace foreign-made parts, the report found.

"There is some evidence that tariffs have contributed to higher repair costs," Brannon said.

How has climate change affected homeowners insurance in recent years?

Extreme weather events, made more frequent and intense by climate change, have been wreaking havoc on homeowners in recent years, though overall insurance markets appear to have stabilised somewhat this year.

Still, since 2019 average home insurance premiums have increased by more than 40%, according to a report released on July 30 by the Insurance Fairness Project, a research and advocacy group.

"As severe weather hits more and more often, if we don't act now, we're heading for an economic crisis that could rival 2008," said TJ Helmstetter, a spokesperson for the group.

(Reporting by David Sherfinski; Editing by Jon Hemming.)