Legal Pot Will Make Insurance Rates Go Up? Pro-Prop 1 Advocate Calls It ‘Silly’

Average auto insurance rates went up $200 per Colorado resident the year after the state legalized recreational marijuana and other states saw a 10 to 16 percent increase the year after they legalized pot, too, according to an anti-legal pot advocacy group.

Scott Greenlee, the president of Healthy and Productive Michigan, hauled out that information from a Smart Approaches to Marijuana (SAM) fact sheet, which showed before and after insurance rates for auto insurance based on the Zebra’s State of Auto Insurance 2018 report. 

Speaking during the October 8th’s MIRS Monday debate on Proposal 1, the legalization of recreational marijuana, Greenlee said, “The reason for that is, obviously, drugged driving and the lack of roadside testing we don’t have.” 

He predicted the same thing would happen in Michigan, a state with already some of the nation’s highest auto insurance rates, because law enforcement doesn’t have the technology to adequately crack down on it. 

“How do I know if you took something three weeks ago or something on your lunch break before you drove the kids home on the school bus?” he asked. “It’s a real issue.” 

Josh Hovey of the Coalition to Regulate Marijuana Like Alcohol failed to see how anyone could make a direct link between marijuana legalization and rising auto insurance rates. 

“You’d be hard pressed to find a state in this country that hasn’t had auto insurance rates go up,” Hovey said. “And to think that legalization will have any impact on what auto insurance companies are going to do is a little silly.” 

Based on the SAM fact sheet, auto insurance rates went down in Alaska a year after legalization and up $5 or less in Nevada and Washington state. Insurance rates did go up from $1,448 to $1,713 in California a year after legalization and $820 to $927 in Maine, but the increase was $15 in Oregon. 

“Insurance companies are going to use any excuse they could possible find to raise our rates,” said Hovey, who has been a spokesperson for the Coalition to Protect Auto No Fault (CPAN). “We’ve seen that in Michigan and the Legislature needs to do something about that. It’s a separate issue altogether. When you look at things like gender discrimination and socio-economic discrimination that insurance companies do. Those are bigger issues.” 

Greenlee added that insurance companies will look any reason to raise rates and marijuana provides a “fantastic reason to do so.” 

The Insurance Alliance of Michigan (IAM) isn’t making predictions on what will happen with auto insurance rates if Proposal 1 is passed, but there is a “great deal of concern in the industry” about vehicle safety in a legalized marijuana world, said IAM spokesperson Mark Fisk. 

“In Colorado they saw an increase in collision claim frequency and, with Michigan’s already highest-in-the-nation auto insurance rates, our fear is that legalized recreational marijuana could make things even worse,” Fisk said.