UI study: Car insurance premiums fall in states where medical marijuana is legal

Iowa City, Iowa — 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 as dangerous as driving drunk.

Cameron Ellis, a U of I 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.

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.

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 of I study essentially debunks that idea, as the two drugs impair drivers in different ways.

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.

The report found about 820-million dollars 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.

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