Medical marijuana frees many from the troubling symptoms of medical conditions. But with recreational cannabis legalization looming, it's threatening some of the liberties that medical cannabis consumers enjoy. Medicinal marijuana patients are already worrying about medication shortages and taxes once legal recreational sales begin. Now they have to worry about possible changes to their homeowners or renters insurance, too.
Insurers are poised to change the rules by which they provide coverage and accept claims. That's on top of landlords and strata councils restricting and even prohibiting home cultivation and smoking indoors and on shared property.
How the Home Insurance Landscape Is Changing
Once the recreational market opens, Canadians using cannabis for medical purposes won't have much to distinguish their at-home use from that of a casual consumer. To a landlord or insurance provider, do the home liability issues with marijuana differ between a patient and a non-patient?
Home insurers are scrambling to change the policies to keep claimants from engaging in risky, claim-generating behaviour. But what constitutes behaviour that could cause a claim? Adjusters say that recreational marijuana consumption may do just that.
Marijuana Consumption & Social Host Liability
Let's say someone goes to a home where cannabis is available. That person leaves the home impaired and gets behind the wheel. Now, if that person then gets into a car accident, the host’s responsibility for allowing intoxication must be considered. That's when casual cannabis consumption crosses over into social host liability territory.
Hosts serving alcohol to their guests face similar risks but because we're talking about cannabis, and it's new, it's also more complicated. Adjusters will do in-depth investigations when they believe there’s a social host issue at play.
An adjuster might ask:
- Why was the claimant at this home?
- Was this a party?
- What was the homeowner doing while hosting the claimant?
- Did the homeowner make marijuana available to guests?
- Did the claimant bring the marijuana or was it the homeowner’s?
- How much cannabis did the claimant consume?
Cannabis Grow-Ops Could Increase Home Insurance Premiums
Another of the home liability issues with marijuana is with growing operations since most provinces, save for Quebec and Manitoba, will allow up to four plants per home for recreational use. A growing operation may also feed the fire of a social host liability claim as marijuana could be considered exceptionally more accessible to guests if it grows on the premises.
Home growers could face increased premiums due to the high-wattage bulbs and humid conditions needed for an indoor cannabis grow. In fact, Canadians might find that many insurance companies won't pay claims at all if they grow marijuana—even if the loss has nothing to do with the cannabis cultivation.
Adjusters Are Getting Creative When Coverage for a Private Marijuana Grow-Op Is Needed
Already, growers under the Access to Cannabis for Medical Purposes Regulations (ACMPR) run into problems when their growing needs exceed the confines of a single tent and modest energy usage.
With an extensive ACMPR grow, home insurers won’t provide insurance, so the grower may decide to cultivate their cannabis in a commercial building. But that means the building owner may lose their insurance because marijuana cultivation is going on there. So, building owners asked adjusters to create customized coverage for them—building owners who provide the space but have nothing to do with the marijuana growing.
Canadian adjusters are networking with adjusters’ associations in the U.S., where in a few states legal recreational marijuana has existed for years, to pick up tips on how they can still provide sensible insurance coverage once legalization kicks in. Meanwhile, Canadians are finding their insurance coverage offshore with brokers knowledgeable in cannabis and willing to insure them for their home, and perhaps even the contents of their growing operations.
Photo credit: Wesley Tingey
