Oct 12, 2023 - News

Cannabis DUI insurance eyes Oregon market

Illustration of an umbrella with a repeating pattern of marijuana leaves.

Illustration: Maura Losch/Axios

Insurance against some costs of driving while potentially high may be soon coming to Oregon.

What's happening: A Utah-based start-up offering insurance to cover the costs of defending a cannabis DUI charge has applied to sell its product in Oregon.

Why it matters: Some research shows tests of bodily fluids for THC don't reliably correlate with intoxication, yet they are used to prosecute DUI cases.

  • The company testing the novel insurance product — reepher — says this discrepancy can lead to cannabis users being wrongly charged with driving under the influence.

Be smart: THC is a component in cannabis that provides the high, and an ingredient in some CBD products, like chocolate, that are not designed to provide a high.

By the numbers: The cheapest insurance product offered by reepher costs $15 per month and offers up to $15,000 in potential coverage.

  • Caps apply — such as $8,000 in defense attorney fees and $1,500 to recover a car that's been towed.
  • Premiums may be higher for people with previous DUIs, or other drug or traffic violations.

How it works: reepher launched in late 2021 and currently operates in six states as a prepaid legal expense plan.

  • It has raised $1.2 million in investments and has signed up less than 1,000 customers, CEO Justin Kahn tells Axios.
  • Their application to offer a similar service in Oregon is on hold while they try to work out a deal with an insurance carrier that would allow them to operate as an insurance product in all 50 states.

What they're saying: "There needs to be a new type of coverage that protects people from the financial consequences of their own behaviors, which are not illegal," Kahn tells Axios."But if you end up on the wrong side of the risk it can be a costly endeavor."

  • He says Oregon is of particular interest to the startup "because there is a large swath of the population that does consume cannabis."

Yes but: Tom Baker, an expert in insurance law at the University of Pennsylvania Law School, tells Axios that reepher's products seem similar to "peace of mind" insurance, like for trip cancellation or identity theft.

  • "It's unusual" to offer insurance for "conduct that would be regarded as criminal," Baker said.

Zoom in: Oregon crime statistics show that over the past two and a half years, law enforcement made 210 driving under the influence citations where marijuana was involved, and 64 disorderly conduct citations.

Zoom out: Nationally, marijuana is the second most common drug found in blood tests of drivers involved in crashes, per federal research.

  • A recent paper by the National Association of Insurance Commissioners cites a "direct relation" between legalized cannabis and car crashes, as well as a general rise in DUIs.

What we're watching: Whether consumers decide this kind of insurance is worth the cost.

What's next: If cannabis DUI insurance sells, reepher plans to get into insuring behavior related to relationships — starting with marriage and divorce.

  • Marriage insurance would cover costs, for example, if one partner didn't show up for the wedding.
  • For divorce, "we're not going to pay alimony. We pay for the lawyer and for the life disruption," Kahn tells Axios.

Editor's note: This story has been corrected to note that fewer than 1,000 customers have been signed up, not around 1,000.

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