Auto insurance premiums decreased in states following the legalization of medical marijuana, according to a new study. The study bolsters research indicating Cannabis reform is associated with reduced risks of dangerous driving, reports Marijuana Moment.
The journal Health Economics published the study this month. Insurance data from 2014-2019 showed premiums dropped by about $22 per year on average after states enacted legalization. The study’s authors think that may have something to do with reduced drunk driving in those states. That means a possible substitution effect is at work, whereby people switch from alcohol to weed.
A $22 premium reduction might not seem significant on its face. But the reason for the meaasured decline is important. Medical marijuana, quite simply, means better road safety. That translates into significant cost savings, including, of course, people paying insurance premiums. And it also means overall savings for health-related expenditures related to auto accidents.
$1.5 Billion In Savings
The analysis determined that “medical cannabis legalization has reduced auto insurance premiums by $1.5 billion in all states that have currently legalized, with the potential to reduce premiums by an additional $900 million if the remaining states were to legalize”—a combined total of $2.4 billion in potential payment reductions for drivers under nationwide medical cannabis access.
“Because auto insurance premiums are directly tied to property damage and health outcomes, we find evidence of a positive social impact of medical cannabis on auto safety,” the study found.
Lower health expenditure auto claims has also meant about $820 million annually in cost savings just in medical marijuana states, according to the study.
“A More Comprehensive Picture”
What makes the study unique is its focus on auto insurance trends. Most research into the relationship between Cannabis reform and traffic safety have looked at data on auto fatalities.
That paints an incomplete picture, however, researchers said, because only a small fraction of car accidents involved fatalities.
“The existing literature misses over 99.5 percent of auto crashes,” the new study says. “Auto insurers cover 67 percent of all medical and property damage from automobile accidents. Through this lens, we paint a more comprehensive picture.”
The Safety Effect Is Stronger Near Dispensaries
The zipcode-based analysis found lowed in annual premium costs “stronger in areas directly exposed to a dispensary, suggesting increased access to cannabis drives the results.”
“In addition, we find relatively large declines in premiums in areas with relatively high drunk driving rates prior to medical cannabis legalization,” the study says. That’s consistent with substance substitution, according to the study’s authors.
Co-author Cameron Ellis, a researcher at Temple University, said “the main takeaway is that, even though driving while high is dangerous, medical cannabis legalization can actually make the road safer by reducing the prevalence of drunk driving enough to outweigh it.”
More Likely To Stay At Home?
But it’s not just the substitution effect at work, according to Ellis.
Studies have consistently found that people use marijuana as a substitute for other drugs, including alcohol and prescription drugs. But another factor could be that even people who use both alcohol and marijuana are “more likely to stay home or go to house parties, instead of drinking at bars,” Ellis said.
“The individual effects we find are very small ($22 per year on your auto insurance). But they definitely add up since so many people have auto insurance,” he said.
“Little Or No Increased Risk Of A Crash From Marijuana Usage”
A separate recent study found that legal marijuana states are seeing less driving under the influence of marijuana than prohibition states.
Experts and activists have emphasized the evidence isn’t clear on the relationship between impairment and blood THC levels.
A 2019 study found those driving at the legal limit are statistically no more likely to be involved in an accident. This is mind you, compared to people with no THC.
The Congressional Research Service in 2019 determined while “marijuana consumption can affect a person’s response times and motor performance…studies of the impact of marijuana consumption on a driver’s risk of being involved in a crash have produced conflicting results.” The CRS noted “some studies [find] little or no increased risk of a crash from marijuana usage.”