Auto Insurance Data Shows Legalizing Medical Pot Is Linked to Less Drunk Driving

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Experts believe that medical cannabis has an impact on the cost of car insurance and safety on the roads. According to a new study published in the journal Health Economics, auto insurance premiums have collectively decreased in states that legalized medical cannabis, Marijuana Moment reports.

This new study builds on already existing research showing that cannabis reform is associated with a reduced risk of dangerous (and intoxicated) driving — contrary to popular prohibitionist talking points.

The study looked at insurance data from 2014 to 2019. Researchers found that premiums went down by about $22 per year on average in states after legalization was enacted. The study’s authors believe it has something to do with reduced drunk driving in these regions, signaling a possible substitution effect whereby people swap out alcohol for weed. 

While $22 may not seem like a lot, it’s not necessarily the figure itself that’s important — it’s the reason for the decline that’s noteworthy. Access to cannabis seems to be a better for road safety (especially compared to alcohol), ultimately translating into savings — for people paying insurance premiums and for expenditures related to car accidents.

“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,” the analysts determined. The figure comes out to a combined total of $2.4 billion in potential payment reductions for drivers under nationwide medical cannabis access. That’s a lot of money.

“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 said.

Fewer health expenditure auto claims has also meant about $820 million annually in cost savings in legal medical marijuana states, the study says. And there’s the potential of an additional $350 million in annual savings if cannabis is legalized across the country.

This particular study is unlike others because it focuses on auto insurance trends, whereas most research looks at cannabis reform and road safety use data from traffic fatalities. The researchers of this study say that using traffic fatalities to determine how cannabis access impacts road safety lacks depth because a small fraction of car accidents involve 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 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 zip code-based analysis found that reductions in annual premium costs is “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. “This latter result is consistent with substitutability across substances that is argued in the literature.”

The study isn’t without limitations, however. For instance, the data is taken from self-reported DUIC data. The results still run counter to both prohibitionist arguments against legalization and a recently enacted congressional directive on public awareness campaigns that should be targeted amid the reform movement.

President Joe Biden signed a large-scale infrastructure bill late last year that included an amendment encouraging only the states that have legalized weed to educate people about impaired driving. Advocates met the measure with criticism because, while they want to discourage driving under the influence of cannabis, they also feel that public education campaigns on the issue should be holistic, rather than singling out states with legal weed laws.