This week, President Donald Trump attributed a drop in car insurance premiums to his stringent immigration measures, wrongly linking illegal immigration during the Biden administration to a previous rise in premiums. On Monday, Trump posted on Truth Social a graphic illustrating year-over-year premium changes from 2021 to 2026, showing a sharp increase from 2021 to 2023, followed by a decline in 2024, leading to negative growth by 2026. The graph cites a Council of Economic Advisers’ analysis using Bureau of Labor Statistics data.
The post stated, “Car Insurance Premiums rose to RECORD HIGHS, forcing Law-abiding American Citizens to subsidize the ‘free riding’ Biden Illegals. After over a year of ZERO ILLEGAL IMMIGRATION, and our highly successful efforts to REVERSE the Biden Invasion, Car Insurance Premiums have come tumbling down.” However, experts attribute the increase primarily to the COVID-19 pandemic rather than illegal immigration.
Fact-Checking the Claims
The assertion connecting immigration policies to car insurance premium fluctuations is inaccurate. Experts emphasize the pandemic’s impact, citing riskier driving behaviors and supply chain issues that increased repair costs. With improved financial conditions among insurers, rates are now being reduced to remain competitive. There is no substantial evidence linking illegal immigration to changes in insurance premiums.
Michael Clemens, a Johns Hopkins University economics professor, and Peterson Institute for International Economics senior fellow, dismissed the claims as baseless, stating, “It does not arise from any study by the White House, by the auto insurance industry, or even by anti-immigration pressure groups. It has no basis in anything but inflammatory statements that juxtapose two unrelated trends.”
COVID-19 Impact on Driving and Premiums
The COVID-19 pandemic started in March 2020, leading to reduced driving as social distancing measures were implemented and remote work arrangements became widespread. This resulted in fewer car accidents and claims, enabling insurance companies to decrease rates and attract new clients. However, as driving resumed in 2022, accidents and claims increased, driven by factors like reckless and distracted driving. Concurrently, the supply chain issues raised costs for auto parts, and insurance companies passed these costs onto consumers.
By 2024, declining accidents and improved insurer finances led to rate reductions. Mark Friedlander, representing the Insurance Information Institute, explained, “Over the past two years, the auto insurance industry has generated an underwriting profit following the implementation of significant rate actions to offset losses. Average auto insurance premiums have begun to stabilize, and replacement costs are more in line with the U.S. inflation rate. We are seeing average rate decreases being implemented across numerous states, as well as dividends being paid to policyholders by major auto insurers such as State Farm and USAA.”
Study on Uninsured Drivers
A 2023 study in the Journal of Insurance Issues discovered that regions with larger numbers of undocumented immigrants faced higher uninsured driver counts, which affected premiums. This link appeared only in states restricting driver’s license access to undocumented immigrants. Clemens noted this connection fails to account for the 50% increase in premiums post-pandemic, calculating that increased illegal immigration under Biden might explain a mere 0.07% premium rise.
Trump’s Truth Social post also reiterated a debunked claim accusing Biden’s immigration policies of allowing criminals from prisons and mental institutions into the U.S. The White House has not yet provided a comment.