What effect will the growing legalization of marijuana have on U.S. auto insurance? Experts agree it’s too soon to tell until the statistical impact that cannabis will have on auto accidents. Or to know exactly how marijuana use affects car insurance rates.
To date, 33 states and the District of Columbia have approved the medical use of marijuana. In 10 states and D.C., it’s been decriminalized entirely, according to ProCon.org.
In 2012, Colorado and Washington state became the first political jurisdictions anywhere in the world to legally regulate the production and distribution of marijuana, according to the nonprofit Drug Policy Alliance. And in 2018, Canada legalized the recreational use of pot for those 18 and older.
For auto insurers, however, the drug itself poses a number of issues that time alone can solve. And consumers may wonder if marijuana use can affect their car insurance rates.
A brief history of marijuana
Long used as herbal medicine, the hemp plant Cannabis sativa L was first regulated under the Marihuana Tax Act of 1937. Over time it got lumped with heroin, peyote, and LSD as a Category 1 drug under the Controlled Substances Act of 1970. Thank the psychedelic Sixties in part for that turn of events.
Marijuana users become intoxicated differently depending on a variety of biological factors. The potency of its active ingredient – delta-9-tetrahydrocannabinol, or THC – varies considerably depending on how it’s used. You can inhale it, eat it, apply it topically (as lotions or oils) or absorb it using sublingual lozenges.
While smoking usually produces an immediate 2-4 hours of intoxication, other methods of marijuana intoxication arrive and depart on different schedules.
Can marijuana use be detected?
According to a study by the National Highway Traffic Safety Administration (NHTSA), the level of THC in the body drops rapidly after marijuana use, fading well before intoxication does. As a result, measuring THC levels following an accident does not necessarily prove that the driver was under the influence.
Because trace THC can remain in your body for weeks after using cannabis, officials remain unconvinced that any onsite measurement tool could measure intoxication the same way that a “breathalyzer” captures drunk drivers.
How do states with legalized marijuana enforce the driving-while-intoxicated issue? Several states have enacted maximum blood-THC limits, holding that drivers with THC above those numbers will be considered intoxicated.
But their concern for the possible negative impact of increased stoned drivers on their roads doesn’t stop at driver safety.
Will marijuana use affect your car insurance rates?
So far, vehicle accidents in states with legal marijuana have gone up, according to Lucian McMahon, a senior research specialist with the non-profit Insurance Information Institute (III).
“The Highway Loss Data Institute late last year found an estimated 6 percent increase in collisions in states with legal marijuana, compared to non-marijuana states,” he says.
Could that upward trend in fender-benders cause a rate creep in marijuana-state premiums?
“It’s hard to say, as there are many different factors that determine rates in each state,” McMahon says. “It’s still very much a wait-and-see.”
Indeed, according to state filings, legal marijuana states saw an average increase of 10 to16 percent in auto insurance premiums their first recreational pot year. Rate hikes vary, from $200 in Colorado to $107 in Maine to $5 or less in Nevada and Washington state.
A standard personal auto insurance policy doesn’t specifically address driving under the influence of any drug, whether alcohol or marijuana. But McMahon says, “If you’re a medical marijuana user and get into a collision, your marijuana use might impact your premium.”
“Are insurers asking policyholders? I haven’t seen that, and I don’t believe that’s asked on the standard application,” McMahon says. “I would find it surprising if regulators allowed that to go through. You get into all sorts of sticky issues around medical privacy and statutory protections for marijuana cardholders.”
The bottom line is that marijuana use isn’t likely to affect car insurance rates soon. Insurers want statistically relevant driving data on the impact of legal, recreational, and medical marijuana use.