President Donald Trump recently credited his strict immigration policies for a decrease in car insurance premiums, misattributing previous increases to illegal immigration under former President Biden. In a Truth Social post, Trump presented a graphic depicting changes in premiums from 2021 to 2026. The data indicated a sharp rise from 2021 to 2023, with a decline starting in 2024.
The graphic referenced a Council of Economic Advisers’ analysis of Bureau of Labor Statistics data. Trump 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.”
Experts, however, attribute the rise in premiums to the effects of the COVID-19 pandemic. Increased road risks and supply chain disruptions leading to costlier repairs were more significant contributors. As insurers stabilized financially, they reduced rates to stay competitive. Illegal immigration was not a significant factor in the insurance premium trends.
Fact Check: COVID-19, Not Immigration, Influenced Premiums
Trump’s claim of immigration policies affecting insurance premiums is false. Experts clarify that the increased costs were largely due to pandemic-related factors such as riskier driving behaviors and increased repair expenses. Michael Clemens, an economics professor at Johns Hopkins University, indicated that Trump’s statement was unfounded, lacking evidence from any reliable study or industry analysis.
Initially, driving decreased at the pandemic’s onset in March 2020 as remote work and social distancing were adopted, resulting in fewer accidents and claims. Consequently, insurance companies enjoyed higher profit margins, enabling them to reduce rates. When driving resumed in 2022, more accidents and claims followed. Reckless and distracted driving, along with supply chain challenges, contributed to elevated insurance costs. By 2024, improved financial conditions allowed insurers to lower rates.
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, an Insurance Information Institute spokesperson.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.
Research on Immigration and Insurance Connections
A 2023 study in the Journal of Insurance Issues found a higher count of uninsured drivers in areas with significant illegal immigration. Uninsured drivers increase premiums, but this is evident only in states that restrict driver’s licenses for illegal immigrants. Clemens emphasized that the estimated 50% premium increase post-pandemic couldn’t be attributed to immigration, asserting illegal immigration under the Biden administration accounted for only a 0.07% increase.
Trump also reiterated his frequently debunked claim that Biden’s policies allowed numerous criminals entry into the U.S. The White House did not immediately comment on the matter.
For verified information, refer to AP Fact Checks.
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