Get ready for higher auto insurance premiums

Get ready for higher auto insurance premiums | Insurance Business

Get ready for higher auto insurance premiums

While Canada’s legalization of cannabis went off without a hitch, discussion about how it affects the country in the long term continues – particularly when it comes to auto insurance.

Echoing the statements of another insurance expert, Ratehub.ca senior business unit manager for insurance Matt Hands believes the increase in auto insurance premiums due to marijuana’s legalization is not a matter of why, but when.

Take a deeper dive into this issue at Cannabis Cover Masterclass Toronto.

“Once insurance providers analyze the data available to them, in most cases, they will need to apply with provincial regulators before they can raise rates,” Hands told Yahoo Finance in an interview. “This means it will take months or even years before Canadians will see the full impact of recreational cannabis legalization on what we pay for car insurance.”

Data on cannabis-related accidents and impairments in Canada remains scant – as the substance was just legalized weeks ago, but data from the neighboring US suggests that auto insurance costs could actually increase as a result.

New findings from the US-based Insurance Institute for Highway Safety (IIHS) and the Highway Loss Data Institute (HLDI) found that collision claim rates increased 6% in states that had legalized the recreational use of marijuana. Those states – Colorado, Washington, and Oregon – all saw more collisions compared to other states, such as Idaho, Utah, Wyoming and Montana, where cannabis has not yet been legalized recreationally.

“The new IIHS-HLDI research on marijuana and crashes indicates that legalizing marijuana for all uses is having an impact on the safety of our roads,” said IIHS and HLDI president David Harkey in a statement.

 

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