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Canada Just Legalized Marijuana. Here's How It Might Affect Auto Insurance Rates

Feb. 15, 2019
3 mins
Professional couple in grey vehicle

First-time car insurance consumers have something new to think about this year. Marijuana is now legal in Canada. Many Canadians have admitted to driving after using cannabis, but the connection to road safety is uncertain. Some U.S. jurisdictions where cannabis is legal have reported higher crash rates. If there is a similar effect in Canada after marijuana legalization, there may be a spill-over effect on insurance rates. Here's what the new laws may mean to you.

In October, Canada Legalized Recreational Marijuana

The decriminalization of marijuana came into effect in October 2018. After the law passed in June, Prime Minister Trudeau tweeted that it had been too easy for kids to get the drug while criminals made a profit. The reason for decriminalization, therefore, is to reduce pot-related crime. Health officials, however, still worried about the results of legal marijuana.

It has always been illegal to drive impaired. It is an offence to drive with a certain amount of THC, the active ingredient of cannabis, in the blood. To address concerns about people driving while high, Canada updated how it investigates drug-impaired driving by using oral fluid drug screeners and other techniques like a Drug Recognition Expert (DRE) Evaluation. Drug-impaired driving holds a potential sentence of a fine or imprisonment, depending on the amount of drug in the body and whether the driver has a previous drug-impaired driving conviction.

In addition to criminal sanctions, there are also distracted driving penalties in most provinces. These laws try to prevent driver inattention while behind the wheel.

How Legalization Could Impact Auto Insurance Rates

It is not yet clear how the new law will impact first-time auto insurance rates or premiums for experienced drivers. Previous data predicted an increase overall in premiums for 2018 before the new law took effect. Drivers are in the dark as much as insurers, as it is unknown how marijuana use could impact collision rates.

There is some evidence from south of the border, however. A study in 2018 found a 6% increase in the number of car crashes in states that had legalized recreational marijuana, compared to nearby states where the drug is still prohibited. If there is also an increase in crashes in Canada, that could contribute to higher insurance rates.

Indeed, recent data from Statistics Canada and the Insurance Bureau of Canada reveal 13% or more of drivers have driven while under the influence of cannabis. That's a startling figure. It is possible that marijuana legalization may impact the number of injuries or fatalities that result from car accidents.

A government of Canada infographic says that cannabis use leads to a 1.3 to 3.0-fold increase in collision rates. If cannabis legalization makes it more dangerous to drive, there could be far-reaching effects even for those who do not use the substance.

First-Time Car Insurance Rates Across Canada

The decriminalization of marijuana is still new. Insurers and drivers are still learning how it might affect hazards on the road and premium rates. To find out the best deal on car insurance in your province, check out the search-by-postal-code function on


The RATESDOTCA editorial team are experienced writers focused on sharing stories and bringing you the latest news in insurance and personal finance. Our goal is to provide Canadians with the information and resources they need to make better insurance and financial decisions.

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