Experts Debunk Trump’s Claims About Car Insurance Premiums and Immigration

Trump’s Claims About Car Insurance Premiums

President Donald Trump recently attributed the drop in car insurance premiums to his strict immigration policies. In contrast, he blamed the rise in premiums during his predecessor’s term on illegal immigration. Trump’s assertions were made in a post on Truth Social, where he shared a graphic showing changes in premiums from 2021 to 2026. The graphic illustrated a sharp increase from 2021 to 2023, followed by a decline starting in 2024.

“Car Insurance Premiums rose to RECORD HIGHS, forcing Law-abiding American Citizens to subsidize the ‘free riding’ Biden Illegals,” the post reads. “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.”

The graphic cited an analysis by the Council of Economic Advisers using data from the Bureau of Labor Statistics.

The Reality According to Experts

Experts have refuted Trump’s claims. They point out that the increase in premiums was primarily due to the COVID-19 pandemic, not illegal immigration. Factors like riskier driving behavior and supply chain disruptions led to higher repair costs. As a result, insurers are now reducing rates to remain competitive.

Michael Clemens, a professor of economics at Johns Hopkins University and a senior fellow at the Peterson Institute for International Economics, stated, “This claim is pure fiction. 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.”

During the pandemic’s onset in March 2020, driving decreased as people socially distanced and worked from home. This led to fewer accidents and fewer claims, resulting in insurance companies having large profit margins. They utilized these profits to lower rates and attract new customers. As driving increased again in 2022, accidents and claims followed suit.

Factors like reckless and distracted driving also contributed to the increase in premiums. Meanwhile, supply chain issues caused auto parts to become more costly, which insurers passed on to customers through higher premiums.

In 2024, as accidents decreased, rates began to fall again, with insurers regaining better financial standing.

The Impact of Immigration on Insurance

Mark Friedlander, a spokesperson for the Insurance Information Institute, noted, “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.”

A 2023 study published in the Journal of Insurance Issues found a correlation between populations with a higher number of people who entered the U.S. illegally and uninsured drivers, affecting premiums. However, this link exists only in states where these individuals cannot obtain driver’s licenses, which are generally required to insure a vehicle.

Clemens observed that this connection cannot explain the 50% increase in car insurance premiums seen after the COVID-19 pandemic, estimating that the surge in illegal immigration during the Biden administration accounts for only about a 0.07% increase in premiums.

In his post, Trump also reiterated his often-debunked claim that Biden’s immigration policies have allowed millions of criminals into the U.S. The White House did not immediately respond to comment requests.