Marijuana Use and the Impacts on Insurance
Contributed by: Chris Ward
The laws governing marijuana use and possession can be complex, confusing and even conflicting. At this moment, federal law still classifies marijuana as an illegal substance – while more than half the states in the country now allow it for at least medicinal use (1). In other states, even recreational use is freely permitted and no special card is necessary.
There’s been a great deal of discussion about the rapidly evolving legal landscape regarding cannabis – so you’re likely fairly familiar with the state of things at the moment. Yet, one topic which gets largely ignored, is how marijuana use impacts your insurance. You likely have many different types of insurance, including life, homeowner’s or renter’s, car and health insurance.
While health coverage and marijuana is probably your biggest concern, marijuana use can at least mildly impact every insurance product mentioned (2). To help you get a better grasp of how marijuana will affect you in this regard, let’s cover each one in more detail below.
You may not automatically think about car insurance, when the topic of marijuana is discussed. Yet, it’s illegal to operate a motor vehicle while high or stoned – and if you’re caught doing so, you’ll be charged with Driving Under the Influence (DUI) (3). Some states have different terminology, such as Driving While Intoxicated (DWI) – but it is the same violation. Though these laws were originally instituted for alcohol use, there’s no separate category for driving while under the influence of cannabis.
Zero Tolerance or Per Se Cannabis Laws
The individual states have set their own policies on the matter, with some instituting blood tests to measure the amount of THC in your blood. If you’re pulled over and test higher than the allowable limit (with some states setting the limit at zero), you’ll be charged with a DUI. This is problematic, as the level of THC in your blood isn’t well-correlated with impairment (unlike the strong correlation between blood alcohol levels and impairment) (4).
Other states have adopted a more balanced attitude, using blood tests but also examining the driver to determine if they’re impaired – and then making a decision using both pieces of information.
Still other states don’t use blood tests at all, and evidence of your impairment must be demonstrated (5).
The Importance of Being Informed
These categories, as reported by the Huffington Post at the end of last year, showcase how it’s important for you to be informed. You certainly need to know the laws in your home state, but if you travel often – then knowledge about the laws in other states is also critical.
Otherwise, you could find yourself staring down the barrel of a costly DUI, even if you aren’t impaired by the amount of THC in your blood. In states where driving while over the legally allowable limit (which may be zero), you’ll be charged with a DUI all the same. To help avoid this unwanted scenario, learn about the current marijuana policies in each state on this page.
DUI and Your Insurance Rates
Getting back to the original topic of marijuana use and your car insurance, your rates won’t be any higher than non-marijuana users. However, if you get a marijuana-related DUI, then your rates will jump up considerably – so this is best avoided.
Homeowner’s or Renter’s Insurance
Here the impact on your rates and policy typically won’t be as pronounced, when it comes to marijuana use. If you’re legally allowed to possess the marijuana that’s present in your home, and it is lost due to theft, fire, flood or other covered event – then you may be reimbursed for it. This is comparable to prescription drugs in your home being lost, or even off-the-shelf drugs if your state permits recreational marijuana use without a prescription.
The reason that coverage can’t be stated definitively, is due to the variances between different policies and insurers. You must speak with your specific provider, to discuss the particular coverage that your policy offers.
This exact question has also been taken up in court in recent years, with some denials by insurance companies being upheld. The reason cited was because marijuana is still classified by the federal government as an illegal substance – so possession of it in your home shouldn’t be covered (6).
State by State Laws Cropping Up
Yet some states are again taking it upon themselves to enact their own marijuana laws – making insurance claims for cannabis loss valid. This means that rote denial of a marijuana-related insurance claim won’t be permitted (7).
As seen with the trend of states deciding how to handle marijuana for themselves, legislation on a state level dictating how insurers must deal with marijuana-related claims, is likely to rise in the future.
Growing Marijuana and Your Insurance
You should also be aware that growing marijuana on your own land is permitted in some states, up to a certain amount or number of plants. Again, these could be covered, since they are a legal possession on your insured property (provided you remain within the law regarding the growing of cannabis in your state).
However, here again insurers have been fighting this in court, using the same argument mentioned above. Your underwriter also may require that you inform them, if you’re growing cannabis in your home. Otherwise, they may use you’re failure to do so, as grounds to deny your claim (8). To know for sure if you’re covered, you’ll have to speak with your insurance company about the specifics of your particular homeowner’s or renter’s policy.
If you are in possession of illegal marijuana, then obviously this won’t be covered. If you’re in possession of amounts above the allowable limit, or have more plants growing on your property than permitted – the overage won’t be covered under your homeowner’s or renter’s insurance policy.
Though you may be surprised to learn it, marijuana use can have a significant impact on your life insurance rates. In fact, according to trusted financial resource NerdWallet, even as recently as your parent’s generation – insurance companies frequently refused to insure marijuana users. Fortunately, the scene today isn’t nearly as austere, though getting hit with much higher premiums isn’t unusual (9).
Why does this happen? One of the big reasons that life insurance companies don’t like the risk presented by marijuana users, is that they often classify them as smokers. Since the cost of life insurance for people who smoke is typically triple (at least) the standard rate – your marijuana use could cost you an arm and a leg.
The Rules of Classification
The key to getting a reasonable rate as a marijuana user, is to find a company that will classify you as a nonsmoker. The policies in this regard vary from insurer to insurer – so it’s worth your while to search until you find one that’s favorable towards your situation (10).
Typically, you’ll stand a better chance of being classified as a non-smoker, if you have a prescription and only use marijuana one time per week or less. In states where recreational use is legal, it’s still possible for you to be designated as a non-smoker – though your rate will still likely be higher than the usual rate.
Wide Differences Abound
These are just generalities, and each insurer has its own policies. For example, some companies reserve their best rates for individuals who use marijuana only two times per year or less. Others extend a standard non-smoker rate to applicants who use marijuana twice a month – whereas another gives this rate to those who use it twice a week (11). With such wide differences in the rules, it’s highly recommended that you thoroughly shop around for the best plan for your frequency of use.
As seen above, how marijuana use impacts your car, homeowner’s or renter’s and life insurance can be a rather convoluted discussion. Health insurance stands in stark contrast, and here the answer is cut and dried. The federal government classifies marijuana as a Schedule I drug and it isn’t an FDA approved treatment – both of which mean that legally your health insurance company can’t cover it as an approved medication (12).
Why the state by state laws on the legality of marijuana affect how insurance works for other types, but not for health coverage, isn’t clear. Yet, reputable sources agree – your health insurance underwriter simply won’t reimburse you for medical cannabis costs in any way, shape or form. This includes taking advantage of your Health Savings Account, as cannabis purchases aren’t an approved expense (13).
If you have a business, you may be wondering how marijuana use by your employees could influence your rates. Though using a group health insurance broker can help lower the rates that both you and your employees pay – it’s just not possible to find a plan that includes cannabis in its approved list of medications.
Therefore, whether you have an individual health insurance policy or a group plan through your employer, you’re unfortunately out of luck for cannabis-related reimbursement. While in those states where medicinal or recreational use is allowed, you can use marijuana within the guidelines set forth by the applicable laws – you’ll have to pay for it out of your own pocket.
(3) High and stoned are different physiologic states induced by smoking marijuana: https://www.quora.com/Why-is-being-high-referred-to-as-being-%E2%80%98stoned%E2%80%99
It’s illegal to operate a motor vehicle while under the influence of marijuana – even if you’re legally allowed to use marijuana in that state. This is the same as alcohol, where you may be legally permitted to drink it (if you’re over 21), but your not legally permitted to drive while under its influence: https://dui.drivinglaws.org/resources/can-i-get-a-dui-for-driving-high-on-marijuana.html