UI study: Legal pot brings lower car insurance rates

IOWA CITY — A University of Iowa study finds automobile insurance premiums dropped in other states after they legalized medical marijuana, suggesting that driving while high may not be quite as dangerous as driving drunk.

Cameron Ellis, a UI professor of finance, says they studied insurance data at the ZIP code level and found states that made medical marijuana legal between 2014 and 2019 saw premiums fall an average of 22-dollars per driver in the first year.

“In areas that had high levels of DUIs prior to medical cannabis legalization, rates fell at a much higher rate,” Ellis says, “because as bad as marijuana is for driving, alcohol is much worse, and so it’s sort of this reduction in DUIs that’s leading to the decline.”

There are likely two explanations for this, he says, the first being that some of the people who were arrested for driving while impaired by alcohol simply changed their drug of choice — from alcohol to marijuana. “But another potential one is that when you consume alcohol and marijuana together, you tend to do it at home,” Ellis says. “You don’t go smoke in a bar, you do it at home and so you’re just literally driving less while drinking, even if you’re not drinking less.”

Opponents of the legalization of marijuana often argue that such a move would lead to an increase in motor vehicle accidents along with a rise in crash-related injuries and deaths. Ellis says the U-I study essentially debunks that idea, as the two drugs impair drivers in different ways.

“There’s this trope of someone’s like, ‘Oh, I’m a better driver while I’m drunk,’ but, no you’re not, but you’re really, really confident and that causes a lot of problems,” Ellis says, “whereas marijuana famously, you’re paranoid that there are cops everywhere, ‘I don’t want to get caught, I’m going to go exactly the speed limit’.”

Those who are against legalizing marijuana, for recreational or medical uses, point to the harm already caused by people who drive under the influence of alcohol and argue legalizing another mind-altering chemical will lead to even more crashes, injuries and deaths. Ellis argues that alcohol tends to make drivers more aggressive, while marijuana has a mellowing affect and makes drivers more aware of their inabilities, so they drive slower and take fewer risks.

“That’s sort of the key thing of why driving while high is not nearly as dangerous as driving while drunk,” Ellis says, “though it is still very dangerous and very illegal.”

The report found about $820-million has been saved so far in crash-related health expenditures as a result of marijuana legalization. Ellis says if medicinal marijuana was legalized nationally, another $320-million could be saved.

The study was published by the journal Health Economics. Iowa law allows the use of vaporizable cannabis oil, but smoking marijuana is not allowed.