Trump Blames Immigrants for Car Insurance Spike. Experts Say It’s the Pandemic

When the country reopened in 2022, driving returned. Accidents returned with it. Reckless driving and distracted driving rose, according to industry data. At the same time, supply chains choked. Replacement parts became scarce and expensive. New and used car prices climbed. Insurers had no choice. They raised premiums to cover higher repair costs and more frequent claims.

Premiums peaked in 2023. Then the cycle turned again. Accidents began to decline. Insurers found themselves on better financial footing. Mark Friedlander, a spokesman for the Insurance Information Institute, said the industry has generated underwriting profit for two straight years. “Average auto insurance premiums have begun to stabilize,” he said. He noted rate decreases across numerous states and dividends from State Farm and USAA.

The White House offered a different explanation. Kush Desai, a spokesman, pointed to falling traffic fatalities and the removal of more than 20,000 non-English-speaking commercial truck drivers. “These objective facts are lowering risks for American drivers on American roads – and thus lowering car insurance premiums,” he said.

A 2023 study in the Journal of Insurance Issues found a link between undocumented populations and uninsured drivers. Uninsured drivers raise premiums for everyone. That link only holds in states that bar undocumented people from obtaining driver’s licenses. California issues licenses regardless of immigration status. The effect is local, not national.

Clemens estimated that the surge in illegal immigration under Biden could explain about 0.07% of the roughly 50% increase in premiums. “It has no basis in anything but inflammatory statements that juxtapose two unrelated trends,” he said.

The premiums Trump’s chart shows are real. The reason they rose and fell has nothing to do with immigration. It is a pandemic hangover, a supply chain shock, and a pricing cycle that has finally turned.