Marijuana And Your Insurance – Everything You Need To Know
The Cannabis Act came into effect in October 2018, legalizing recreational marijuana in Canada. Since the onset of the legalization, Statistics Canada reported that the country’s cannabis industry now contributes $14.6 billion to the economy. Albeit a newer industry, it is highly profitable and not a passing fad. Now that a few years have passed and the smoke has cleared on the legislation, we have seen the impact marijuana has on various types of insurance. The three main lines of personal insurance that can be affected are your Home, Auto, or Life Insurance policies.
Home Insurance
In Ontario, residents are legally allowed to grow up to four cannabis plants on their property for personal use. Just like other types of legal and exotic plants on your land, marijuana plants are covered by your home insurance in the event of damage or loss. Another consideration for those who choose to grow their own cannabis on residential property is the expensive equipment involved. Canada’s climate limits the ability for cannabis to grow naturally year-round, so many people purchase elaborate lighting, hydroponic technology, and humidifiers for their plants. Not only are these items expensive to replace, but they also have the potential to introduce moisture, mould, fungi, or mildew into the home through normal use. Some home insurance policies exclude damage caused by mould or fungi regardless of the source. It is important to discuss any cannabis-related technology with your broker and determine the limits of your policy prior to growing your own cannabis plants.
The final implication of the legalization of cannabis and home insurance depends on if the homeowner identifies as a smoker. Not unlike smoking tobacco in your home, smoking of marijuana can have an impact on your insurance rates because of the greater risk of a house fire. This can result in higher home insurance premiums.
Auto Insurance
Drug-impaired driving is illegal in Canada and has been since 1925! This includes the operation of cars, trucks, boats, snowmobiles, and off-road vehicles. Since the legalization of marijuana in the country, police officers have been trained on a different set of procedures for roadside screening and implemented new charges for drug-related impaired driving. The legal limit has been classified as 2 to 5 nanograms of THC per mL of blood. If you are found guilty of driving under the influence of cannabis over the legal limit, you can be fined, have your license revoked, or experience an increase in auto insurance premiums.
Life Insurance
Recreational marijuana users need to disclose how often they participate in cannabis use and in which form. Smoking cannabis or ingesting edibles impact the body differently. Although recreational marijuana use in its various forms will not impact your ability to obtain life insurance, heavy use can cause higher premiums or a declined application.
For medical-related use, you may be asked questions related to your condition during the life insurance application process.
Canada is only the second country in the world – and the first G7 nation – to implement legislation to permit a nationwide marijuana market. Along with this new legislative territory came a new set of risks for insurance companies to consider. If you are still in a haze about how the marijuana laws impact you or would like to know more about protecting your family or business against these risks, please contact your Merit Broker to discuss the details of your policy.
