Cannabis legalization and its effect on car insurance

Tyler Wade
by Tyler Wade August 24, 2018 / No Comments

If you use marijuana, in any of its forms, and own a car, this blog post is for you. It’s a big deal for insurance providers in Canada and they are getting ahead of the curve before its eventual legalization. We’ve seen home insurance adopt to in-home growers with the risks of theft and fire. Health insurance is analyzing the medicinal benefits against the long-term effects. And car insurance is destined for disruption for several reasons.

Why will this affect my car insurance rate?

The jury is still out on how cannabis might affect your rate. What’s important to know is crash rates have increased in areas where marijuana is legal in the US. Auto insurance companies are aware. In fact, since Colorado legalized recreational cannabis use, drivers have seen a 50% hike in premiums. You can be sure Canadian auto insurers will be paying close attention as more statistics come in south of the border. Ultimately, much like alcohol, your driving can be impaired by marijuana use. Currently, there is no formal code in the Ontario Auto Policy about cannabis. However, it’s worth noting their language – not paying for loss or damage to the vehicle while under the influence of “intoxicating substances”.

How will the police detect drug-impaired drivers?

If the police suspect you’re under the influence, they can pull you over. The first step is a 12-step process conducted by a “drug recognition expert” but this, of course, is fraught with biases and false positives. Roadside saliva-testing devices are approved under bill C-46 which passed in June of 2018. These tests only detect cannabis use within the past 6-8 hours. The reliability of these machines, and their results, are sure to see challenges in court. A Vancouver based company, Cannabix Technologies, filed for a patent in April of 2018, for a breathalyzer-like tool to detect marijuana use. As we enter a new age of legalized marijuana use, tools like these will only improve. It’s always important to remember that while it may be legal to consume, it is still illegal to drive under the influence.

What can I do to prevent an auto insurance rate hike?

First, know that your own driving, as good as it may be, isn’t always fair when comparing with friends and family. Your driving profile is the first thing insurers consider when determining the rate you will pay. For instance, you’ll pay more if you’re a young driver, as age is statistically a measure of risk. In fact, car insurance rates are relative to the type of car you drive, your driving history, and how much you drive. Your address alone can show differences from one area to another based on the number of accidents and theft/property damage. That said, if where you live shows an increase in marijuana-related accidents, you can expect to see an increase in your insurance premiums. Right now, much like alcohol, there is no question on the insurance application that asks if you smoke or ingest cannabis.

What if I’m medically allowed to smoke cannabis?

If you carry a medical marijuana card, it’s up to the officer’s discretion if they deem you to be intoxicated or not, and will proceed accordingly. One report I found, when researching this article, is from the National Highway Traffic Safety Administration. It states – while many alcohol-induced drivers tend to overestimate their abilities to get behind the wheel, a pot smoker will underestimate their abilities leading to slower driving and more room between vehicles. However, the Canadian Public Health Association is quick to point out – while more cautious and hyper-focused driving may sound like a positive thing, it also means you live in the moment and can’t react quickly to changing situations around you.

Can I get a DUI charge from driving high?

The short answer is, yes. Though we’re not exactly sure when, as new rules, amendments, and bills are changing all the time. Know that there are proposals in place that will include marijuana usage under the same driving laws as alcohol. As a best practice, we recommend making alternative transportation plans if you plan to use legalized drugs and alcohol. Remember if you are convicted, there will be legal repercussions, such as fines and imprisonment. What’s important for this article, is that you would then be listed as a high-risk driver and your insurance premiums are guaranteed to go up.

How can I find the best car insurance rates to suit my needs?

As always, at Ratehub.ca, we encourage you to shop around and compare car insurance quotes from multiple insurers. Always be honest on your application or you run the risk of a claim being denied or your policy being cancelled altogether due to what the insurance industry calls ‘material misrepresentation of facts’. Be a safe driver (I.e. don’t smoke and drive), look for bundles, and see if your employer, or union, has any discounts with an insurance company.

What’s next for auto insurance legislation in Canada?

There are many more questions than we have answers. The federal legislation is still being finalized. From that, the provinces will build their own rules and regulations. Finally, the insurance companies themselves may choose to approach this idea in their own way. Every insurance provider has a secret sauce for how they calculate risk and determine your rate. Could they potentially charge a higher premium to a person working in the industry, at a clinic, or a manufacturing plant? What if you do have a prescription and they choose to view it negatively? It’s possible, some insurers openly provide policy coverage for medicinal use cases and charge a premium for it. Only time will tell. For now and forever, shop around.

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