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A new study links legalization of medical cannabis with reduced auto insurance premiums that have resulted from fewer accidents on the road. The study estimates that legalization has reduced auto accident-related health spending by $820 million a year.
The study estimates that if the federal government legalized cannabis, another $350 million could be saved. The findings of the study, led by researchers from the Fox School of Business at Temple University, are a far cry from the worries held by cannabis legalization opponents that the roadways in legal states would become filled with dangerously stoned drivers.
Researchers published the study in Health Economics. They theorized that the reduction in accidents that led to a reduction in insurance rates was driven, in part, by fewer people driving drunk because they had access to cannabis.
Does Cannabis Lead to Lower Alcohol Use?
The legalization of cannabis seems to have accelerated a trend that began years ago: Younger U.S. generations drink less alcohol. Part of it is their different attitude about cannabis.
A recent survey found that 58 percent of Americans think alcohol is more harmful to a person’s health than cannabis. There’s a big split among generations: 71 percent of millennials, 63 percent of Gen Z, 55 percent of Gen X, 51 percent of Baby Boomers, and just 27 percent of the Silent generation think alcohol is more harmful than weed.
But has that belief led people to switch from alcohol to cannabis? Some studies indicate that is happening. For example, a University of Washington study found that access to legal cannabis led to a reduction in past-month alcohol use by 21 to 24 year olds. And Massachusetts reported that cannabis sales exceed alcohol sales in 2021.
In California, it’s even led to a trend called “Cali Sober” in which people eliminate or greatly reduce the use of alcohol in favor of cannabis.
A Reduction in Auto Insurance Premiums
The study analyzed insurance data from 2014 to 2019 in states that legalized medical marijuana. Researchers found that premiums dropped about an average of $22 per year after states made medical cannabis legal.
The researchers attributed that drop to safer roads, theorizing that reduced drunk driving is part of the reason. That link between legal medical cannabis and better road safety led to lowered health spending related to auto accidents. It also led to a reduction in insurance premiums totaling about $1.5 billion over the years the study considered.
Researchers also found that “the effect is more substantial in areas near a dispensary and in areas with a higher prevalence of drunk driving before legalization.”
The study offers another point to consider for lawmakers in states where medical marijuana is illegal or limited in use. Those states include larger states such as Texas, Georgia, North Carolina, Tennessee and Wisconsin.