USA: Legal Weed! Get ‘HIGHer’ on Car Insurance Rate Rises!

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Vermont Voters Warned A Vote for Legal Pot is a Vote for Higher Insurance Rates

Reprinted with permission from Statehouse Headliners By Guy Page
October 25, 2018 — Car insurance rates are likely to increase 4-6% 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 October 24, 2018. 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 A 6% 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 in pot-legal states are up about 6 percent compared to neighboring states.

“We want to make people aware that there is a social cost involved,” Lynch told the Herald. In Vermont, 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 Commission to issue its final report, which is due in December. A preliminary draft is scheduled to be ready in November.

But wait — 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.

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