President Donald Trump recently attributed a decrease in car insurance premiums to his firm immigration measures, falsely pointing fingers at illegal immigration during President Joe Biden’s tenure for prior increases. In a Truth Social post, Trump displayed a graph with yearly premium changes from 2021 to 2026. It depicted a steep rise from 2021 to 2023, followed by a decline starting in 2024, leading to negative growth in 2026. The graph referenced an analysis by the Council of Economic Advisers using data from the Bureau of Labor Statistics.
Trump’s statement in the post read, “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.”
The Facts
The claim is inaccurate. Experts have clarified that the surge in costs primarily resulted from the COVID-19 pandemic. The pandemic led to riskier driving behaviors and supply chain disruptions, escalating repair expenses. As insurers regained a stable financial standing, they reduced rates to maintain competitiveness. There is no evidence indicating that illegal immigration substantially influenced the rise or fall of insurance premiums.
“This claim is pure fiction,” said Michael Clemens, a professor of economics at Johns Hopkins University and senior fellow at the Peterson Institute for International Economics. “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 early stages of the COVID-19 pandemic, declared in March 2020, driving decreased as many began practicing social distancing and remote work became common. Fewer accidents led to fewer claims, providing high profit margins to insurance companies, which they utilized to lower rates and attract new customers. As of 2022, as more individuals resumed driving, accidents and claims increased. Factors such as reckless and distracted driving were also significant contributors.
Concurrently, supply chain problems made vehicle parts and materials more expensive, with insurance companies passing these costs to drivers via premiums. Starting in 2024, rates declined again as fewer accidents occurred and insurers improved their financial standing. “Over the past two years, the auto insurance industry has generated an underwriting profit following the implementation of significant rate actions to offset losses,” said Mark Friedlander, spokesperson for the Insurance Information Institute. “Average auto insurance premiums have begun to stabilize, and replacement costs are more in line with the U.S. inflation rate.”
A 2023 study in the Journal of Insurance Issues indicated that areas with a higher number of people entering the U.S. illegally had more uninsured drivers, marginally raising premiums. However, this connection only exists in states where undocumented individuals cannot obtain driver’s licenses, typically necessary for insurance eligibility. Clemens highlighted that this factor couldn’t account for the approximately 50% increase in premiums post-pandemic, estimating that the increase in illegal immigration under Biden accounted for about a 0.07% rise in premiums.
Trump’s post also reiterated a frequently disproven claim that Biden’s immigration policies allowed numerous criminals into the U.S. from prisons and mental health facilities. The White House has yet to comment on the matter.