State Headliners: Car insurance rates to increase in states with legal marijuana

By Guy Page

Car insurance rates are likely to increase 4-6 percent in states with legal marijuana, a leading insurance industry actuary says.

“You’re looking at an increase of around 4 to 6 percent in overall coverage,” James Lynch, chief actuary of the Insurance Information Institute told the Boston Herald. Even if drivers don’t smoke pot themselves, their insurance rates will increase regardless, Lynch said.

A 6 percent increase in insurance premiums on all 615,950 registered vehicles in Vermont would cost about $28.3 million. The average Vermont car insurance premium is $764, according to Reviews.com. A 6 percent increase would add $46 in annual premiums, for a total of $810.

The rate hike would result from the increase in car crashes in pot-legal states, Lynch said. In Colorado, Nevada, Oregon and Washington crashes are up about 6 percent compared to neighboring states.

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Guy Page is affiliated with the Vermont Energy Partnership, the Vermont Alliance for Ethical Healthcare, and Physicians, Families & Friends for a Better Vermont.

“We want to make people aware that there is a social cost involved,” Lynch told the Herald. In Vermont, Democrat legislators and an increasing number of Republicans favor a “tax and regulate” form of commercial, legalized sale of marijuana. Gov. Phil Scott says he still opposes further legalization of marijuana and is waiting for the Vermont Marijuana Commis

sion to issue its final report, which is due in December. A preliminary draft is scheduled to be ready in November.

But couldn’t the Vermont Legislature just raise marijuana taxes and send out a rebate check for $46 per vehicle owner? It’s possible but highly unlikely because state officials rightly fear that every tax hike will perpetuate the established black market. Drug dealers don’t pay taxes or fees. They already enjoy a significant competitive advantage over “taxed and regulated” marijuana sales. A “car insurance rebate tax” would just reduce legal sales revenue while rewarding the black market.

Contrary to the hopes and expectations of some “tax and regulate” supporters running for elective office, the Legislature should not expect any “leftover” cash for existing, cash-strapped programs. The expected T&R fees and taxes will only cover the cost of industry regulation, drug prevention, and public safety, Tax Commissioner Kaj Samson told the Vermont Marijuana Commission on Sept. 10.

Give $28.3 million of state revenue back to car owners? Dream on. A vote for legal pot is a vote for increasing the automobile insurance of every Vermont driver.

Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.

Images courtesy of Wikimedia Commons/Jonathan Wilkins and Page Communications
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8 thoughts on “State Headliners: Car insurance rates to increase in states with legal marijuana

  1. I guess all of this must be part of the Progressive/ Socialist Utopia that we hear about. If this increase in rates happens it will hurt many people in the state.

  2. We’re seeing another consequence of this permissive Progressive legislation in Burlington; a not unexpected relaxation of the boundaries that legalizing pot possession brings, namely public usage. While the law permits private usage, more and more people are smoking high potency pot while walking the sidewalks, on their porches and while driving with their windows opened. This results in innocent, unsuspecting members of the public, including infants and children, being dosed with psychoactive THC without consent and without recourse. I had this happen to me today while driving my vehicle out of my driveway, another obvious potential problem, and several other times in just the last few weeks. One offender was getting high while standing in front of the UVM College of Medicine. Another, on his opened air front porch offered me some when I commented on his behavior. When he realized I wasn’t happy having no choice in getting dosed, he grew hostile and tried to escalate the situation.
    If course Burlington Progressives wouldn’t tolerate the miniscule chance of lead inadvertently dosing children who may play in the dirt near a home that was recently painted, forcing industry changes and skyrocket cost increases for house painting and renovations, when you can find someone who has paid to become a lead certified contractor and is willing to work in Burlington. But broad scale mass dosing of the public with THC, no problem!!

    What surprises me more, and is very problematic, is that calls to the Burlington PD about these episodes are met with dispatchers trying to squash the complaints saying “it’s now legal in Vermont”. Only by affirmatively correcting them saying public usage is not legal, have they eventually offered to send a policeman. It’s becoming apparent to me that their leadership has taken the position that public pot usage is ok with the City. Is this stemming from the Chief or the Mayor? Driving stoned seems to be handled no differently. An insurance premium increase on non-smoking/non-using drivers would be a real slap in the face!

    Further, there are thousands of out of state college students who “forget” to register their vehicles in Vermont, as required by law within 60 days of becoming residents. They want to be considered residents to vote, but be out of state drivers. Seems that choice may soon pay them further in grey money dividends.

  3. Governor Scott shouldn’t have signed that legislation. We tried and tried to persuade him to pass on that , but he wouldn’t listen.

  4. I feel our ” Astute ” legislators should pick up this increase if and when it happens,
    as they are the fools that passed the legislation promoting the legalization of Pot !!

    The only reason the bill was passed was because they were told of all the increased
    revenue the state would be receiving, they were sold a Pig in a Poke. This is just one
    of the many ramifications attached to this bill ……… Idiots !!

    Now Vermonters will be hit with another tax because of Foolish Legislation, we keep
    voting these fools in…………..Wake up !!

  5. Just another case of the many having to pay for the few. Maybe they should register all marijuana users so only their rates increase. ha-ha

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