Legalized and regulated cannabis is on track to become a reality in Canada in just under a year (on or before July 1, 2018). This will create a number of opportunities as well as challenges for the automobile insurance industry. As discussed in our recent articles The Grass Is Always Greener in the Other Jurisdiction, and Cannabis Act Regulations - Now We Are Really Getting into the Weeds! the Federal and Provincial governments are working diligently to develop a regulatory framework for recreational cannabis, but much is still unknown. Accordingly, the biggest challenge facing automobile insurers at present is the uncertainty legalized cannabis brings.

With Canada becoming only the second country in the world to legalize the possession, production, and sale of cannabis nationwide, information on the impact of legalization on this industry is sparse. This makes it difficult to predict whether legalization will result in an increase in the number of drug-impaired drivers on the road. However, we can consider the results of legalization in certain states, and can look to some existing data for insight.

What the numbers say

A recent study by the Highway Loss Data Institute in the United States has reported an increase in collision frequency of about 3% in states with recreational cannabis – Oregon, Washington, and Colorado – in the years since legalization has taken place. However, the study was not able to definitively link the increased collision frequency with consumption of cannabis. This increase could also be linked to a growth in tourism in these states, or any number of other factors.

In Canada, a recent survey from State Farm suggests that many drivers don’t believe driving high is as bad as drinking and driving. In fact, 27% of those surveyed either did not know or disagreed with the idea that driving high was as bad as driving under the influence of alcohol. Additionally, while almost 9 out of 10 Canadians stated they had never driven under the influence of cannabis, 44% of those who had driven high believed it did not impact their ability to drive safely, and 14% did not know if it affected that ability. Lastly, according to the Canadian Centre for Substance Abuse, it is more prevalent for drivers to drive after cannabis use than after consuming alcohol.

With all of that said, a recent New Brunswick Medical Society report states that driving under the influence of cannabis is already prevalent in rural areas, and has suggested that legalization may not result in any change in the frequency of impaired driving. In the face of such uncertainty, and until legalization occurs and sufficient accident data accumulates, insurers should consider insulating customers from premium hikes.

Problems in measurement & roadside testing

Investigations of drug-impaired driving offences are complex, which means that reliably assessing these offences is a significant challenge for automobile insurers. Unlike alcohol related driving offences- where precise samples may be taken orally and impairment limits have been set by blood-alcohol content- there is little agreement in Canada on what type of sample should be tested or what the per se limit for tetrahydrocannabinol (THC) should be in drug-impaired driving offences.

Experts suggest THC concentration drops rapidly in the blood system and therefore will not always provide an accurate measurement of a driver’s level of impairment. Further scientific research on the impairment effect of alcohol and cannabis when consumed together would be beneficial for evaluating impaired driving offenses.

In Colorado and Washington, drivers suspected of drug-impaired driving are required to provide a blood sample. A driver is considered impaired if she/he has 5 nanograms of active THC in his/her blood sample.

Drug-related driving offences are not new to Canada. Currently, law enforcement uses the evidence from “drug recognition experts” who are police officers trained to recognize impairment in drivers under the influence of drugs. Although subjective in nature, the Supreme Court of Canada recently ruled in R v Bingley, 2017 SCC 12 that the opinion of a drug recognition expert may be admitted as expert evidence at trial without the evidence being first submitted to a voir dire, or preliminary examination of the evidence. This ruling makes it easier for law enforcement to establish evidence of drug-impairment, which is beneficially for automobile insurers when assessing drug-impairment insurance claims. However, insurers should keep in mind that law enforcement does not have the same expertise, nor experience, with detection and prosecution of drug-impaired driving as they do with alcohol-impaired driving.

In Canada, Bill C-46 has been tabled in Parliament to amend the Criminal Code (and other acts) and create a framework for dealing with these issues. This bill has passed its second reading in Parliament and has been referred to the Standing Committee on Justice and Human Rights. This act will create new criminal offences for driving with a “blood drug concentration” higher than one prescribed in the regulations, and will authorize law enforcement officials to demand a sample of a bodily substance for analysis by approved drug screening equipment. The particular details will be found in the regulations when they are drafted, but it appears that for the time being, Canada will be taking an approach similar to that of Colorado and Washington.

The path forward

To prepare for the impending legalization of cannabis, automobile insurers should establish a clear framework for handling matters involving cannabis related offences. Insurers should consider/continue using alcohol as a template for cannabis use by treating the use of prescribed cannabis as any other prescription medication, and by applying the same consequences of alcohol impaired driving on cannabis impaired driving. For example, in Ontario, drivers impaired by cannabis use will face the same fines and license suspensions as drivers impaired by alcohol.

While the future remains uncertain, it seems quite likely that recreational cannabis will soon be legal across Canada. Only time will tell the true impact of cannabis legalization on the automobile insurance industry, but insurers would be wise to consider potential impacts today.