Auto insurance got cheaper in states with legal medical marijuana. Why?


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Auto insurance premiums declined in states that legalized medical cannabis, according to a study published in Health Economics. Legal cannabis is often portrayed as a negative when it comes to automobile safety, but authors Cameron Ellis, Martin Grace, Rhet Smith, and Juan Zhang analyzed ZIP code-level insurance data from 2014 to 2019 and found that premiums fell by $22 per year on average after medical cannabis legalization.

Premiums fell even more in areas near dispensaries and in areas with a higher rate of drunken driving before legalization. The study estimates that legalization reduced health expenditures due to auto accidents by almost $820 million a year, and that national legalization would save another $350 million.

Insurance companies set premiums based on risk factors including driving history, age, and credit score, as well as location. In general, the more likely someone is to file a claim for medical expenses or property damage from an accident, the higher the premium they’ll pay. If premiums fall in an area, it’s a good bet insurance companies view that area as less risky for drivers.

The result was somewhat of a surprise, given past studies have shown increases in car crashes and deaths in states that legalized marijuana. 

“We did not expect the result we got, but we went in with an open mind,” says Ellis, an assistant professor of finance at the University of Iowa’s Tippie School of Business. 

Ellis pointed out that the latest results aren’t necessarily inconsistent with previous studies, which assumed that alcohol use was steady after legalization.

“In contrast, we argue that the reduction in DUIs outweighs the increased stoned driving,” Ellis says.

The study finds the increase in auto safety is due partially to a decrease in driving under the influence of alcohol. While they didn’t find evidence that medical cannabis reduces alcohol consumption (though other studies have),  the authors suggest that greater availability of cannabis, which you can’t smoke in a bar, leads more people to stay home to smoke and drink. 

At the federal level, cannabis remains illegal, but 37 states and the District of Columbia have legalized the use of the drug for medicinal purposes; some have gone on to approve recreational pot. Previous studies have tried to measure how legalization affected traffic safety by focusing on fatal crashes. The authors say this is “a significant shortcoming,” since only a fraction of a percentage of auto crashes result in death. Instead, they got ZIP code-level data on auto insurers who end up paying for the majority of medical and property damage resulting from crashes.

Ellis hopes the findings contribute to the discussion around cannabis, as more states, including Minnesota, Kentucky, and North Carolina, consider legalization.

“There are a lot of moving parts to consider when thinking about legalizing cannabis, and some of the positive secondary effects can actually outweigh the negative primary ones,” he says. 

This article originally appeared on PolicyGenius and was syndicated by MediaFeed.

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11 easy ways to pay less for car insurance

11 easy ways to pay less for car insurance

There are many factors that influence your car insurance premium. Many of the factors that determine whether you have affordable car insurance or not, including your age, sex and location, aren’t in your control. But there are some that are. Here are some ways to lower your car insurance bill.


If you haven’t shopped around for auto insurance lately, and you’re hoping for more affordable car insurance, you should probably make this task a priority. Most auto insurance companies will quietly raise your rates over time, which is why shopping around for new car insurance quotes can yield great savings and be a great way to find the cheapest car insurance. It’s also a good chance to check in on your coverage amounts. Many people have too much or too little insurance. This guide can shed some light on how much car insurance you really need.

Many car insurance companies also sell other insurance products — like homeowners and renters insurance — and many of those companies offer discounts for having two or more policies with them. If you have policies with different insurance companies, consider moving them all to one carrier to take advantage of bundling savings, also called “multiple policy savings.” The cheapest car insurance company may be the one you already have another policy with.

Teenagers aren’t the only ones who can earn insurance discounts by taking driver’s education courses. Many states offer lower rates to those who take defensive driving courses. In New York, for example, if you complete a defensive driving course after you start driving an insured vehicle, you’re eligible for a 10% base rate reduction on your liability and collision insurance for up to three years. Not all states, however, offer these courses, and discounts vary state to state. Check with your insurance company or state department of motor vehicles to see if these courses are available to you.

If you’re a student or you have a child who is a student and you are paying for their car insurance, you could save by taking advantage of one of several student discounts. Ask your insurance company about a good student discount. Additionally, if your child is a full-time college student attending a school 100 miles away or more, you could get a distant college student discount so they’re covered when they’re home, but you’re not paying for them when they’re not.

Some insurance companies offer discounted rates if you belong to a particular organization or if you work for a certain company. If you have a membership in an organization or work for a large company, ask about discounts.

Not everyone can afford to pay several months of insurance bills at the same time. But if you can swing one payment for the entire premium for a six-month period, you may be able to save money with a pay-in-full discount. The savings vary depending on the insurance company and where you live. Ask your insurance company if they offer a discount if you pre-pay your premiums, and make note for when you renew your policy.

While you can’t erase any past tickets or collisions on your record, driving safely today can help lead to lower insurance costs. The longer you avoid a wreck or a speeding ticket, the lower the rates can go.

Although most drivers with good driving records are already receiving good driver discounts, if you spent significant time abroad in the past several years or you’re a new immigrant, you could be paying a needlessly high rate. If you’ve just moved to the U.S., you may appear as a new driver in this country, even though you’ve been driving for years in your home country. Many insurance companies will quote you higher new driver rates based solely on your short driving record in the United States. But, you can get around this by providing your insurance carrier with a copy of your good driving record from your country. Ask your insurance company what kind of proof they need to give you a good-driving discount.

Insurers often look to your credit score to determine how risky you are as a driver. You can take steps to improve your scores including paying down your debts, maintaining a good payment history and keeping the number of inquiries on your credit to a minimum. Read more about how to improve your credit score.

Keeping a low deductible on your auto insurance typically requires you to pay a higher monthly rate. On the flip side, you can save money on auto insurance if you boost your deductible. But it only makes sense to do that if you can actually afford to pay the deductible in case of an accident.

Cars with high safety ratings generally have fewer accidents, and cars with fewer accidents are cheaper to insure. If you’re a good driver with a safe car — such as a Nissan Maxima, Volkswagen Passat or Toyota Avalon — you could be paying some of the lowest rates possible. So if you’re shopping for a new car and hoping to keep your car insurance affordable, it makes sense to choose the right car.

This article originally appeared on Policygenius and was syndicated by

Featured Image Credit: RyanJLane.


Myles Ma

Myles Ma is an editor at