President Donald Trump this week took credit for falling car insurance premiums, pointing to his immigration crackdown — but experts say his explanation for why rates rose in the first place simply does not hold up.
In a post on Truth Social on Monday, Trump shared a graphic tracking year-over-year changes in car insurance premiums from 2021 through 2026. The chart shows a sharp climb between 2021 and 2023, followed by a decline beginning in 2024, with rates showing negative growth so far in 2026. The graphic references an analysis by the Council of Economic Advisers using data from the Bureau of Labor Statistics.
“Car Insurance Premiums rose to RECORD HIGHS, forcing Law-abiding American Citizens to subsidize the ‘free riding’ Biden Illegals,” Trump wrote. “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.”
While experts acknowledge the data in the graphic reflects real industry trends, they say the cause of the earlier premium spike was the COVID-19 pandemic — not illegal immigration.
Michael Clemens, a professor of economics at Johns Hopkins University and a senior fellow at the Peterson Institute for International Economics, was blunt in his assessment. “This claim is pure fiction,” he said. “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.”
Here is how experts explain what actually happened: When the COVID-19 pandemic was declared in March 2020, driving dropped sharply as people stayed home and worked remotely. Fewer drivers meant fewer accidents and fewer insurance claims, which left insurance companies in strong financial shape. They responded by lowering rates to attract new customers.
As driving returned to normal levels starting around 2022, accidents increased along with insurance claims. Reckless and distracted driving were also contributing factors, experts noted. At the same time, pandemic-related supply chain problems made car parts and repair materials more expensive — and insurers passed those added costs along to policyholders through higher premiums.
By 2024, the situation began to stabilize as accident rates declined and insurers improved their financial standing.
Mark Friedlander, a spokesperson for the Insurance Information Institute, a major industry trade group, explained the turnaround this way: “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 did find a connection between higher numbers of undocumented residents and higher rates of uninsured drivers, which can push up premiums. However, that link only exists in states where people in the country illegally cannot obtain driver’s licenses — a common requirement for getting insured.
Clemens added that even this limited connection cannot come close to explaining the roughly 50% jump in car insurance costs seen after the pandemic. He estimated that the increase in illegal immigration during the previous administration accounts for only about a .07% rise in premiums.
Trump’s Truth Social post also repeated his previously debunked claim that his predecessor’s immigration policies allowed tens of millions of criminals released from foreign prisons and mental institutions into the United States.
The White House did not respond to a request for comment.
