Cannabis and Your Home Insurance Policy
As we move well into the first year of legalized usage of recreational cannabis, we have started to see a trend in questions, and even a few claims, resulting from this change in law. While recreational cannabis use has implications on many areas of insurance, such as auto in regards to impaired driving regulations, it is in the area of home insurance that seems to be the most misunderstood.
4 common misconceptions of recreational cannabis use and home insurance coverage.
1. Growing Cannabis at Home
On October 17th 2018, Federal law changed to allow for the legal growing of cannabis plants on your property, for personal consumption. However, bill C-45 states that it is only legal to grow up to four plants per household, and not four plants per person. Additionally, both the law and your insurance policy dictate that the seeds, clones or plants must be purchased from a legal source - which in the province of Ontario is still quite hard to find.
2. Cultivating Cannabis at Home
Previous to October 2018, home insurance policies outlined that any structure(s), or any personal property contained in any building where the cultivation, harvesting, processing or manufacturing of cannabis or derivative products were strictly uninsurable. What has changed with legalization, is that insurance companies have added the word illegal in front of the word cannabis. Meaning that much like growing of cannabis at home, if you did not purchase the marijuana for cultivation from a legal source, and can provide receipts, your home insurance policy will not respond in the event of a loss.
3. Rental Properties
As the owner of a rental property, the laws of growing and cultivating illegal cannabis will still apply to you, even if it is your tenants who decided to grow, or cultivate illegally sourced marijuana. Many condo boards acted quickly to create rules surrounding this new legislation, however it is important for your tenant to know the law, and any subsequent private rules when renting out your property.
Canada now allows you to have 30 grams of legal cannabis at one time for personal use - likely not enough to warrant a call to your insurance broker, but should you decide to grow your own legal marijuana plants, those will have higher value. Some insurers allow homeowners to list these plants under their contents insurance.
In summary, your home insurance policy contains an exclusion clause for any goods or items that are viewed as illegal. This is why, if you choose to grow or cultivate cannabis, or keep a certain quantity of it in your home, it is important to comply with the law. Doing otherwise might jeopardize your compensation in the event of a loss.