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How Does Cannabis Legalization Affect My Insurance?

With the recent cannabis legalization in Canada there are a few insurance matters at hand. While most insurance companies have amended their policies to conform with the new laws, it is best to check with your own company before consuming or growing marijuana.

What Exactly Does the new laws state:

– Smoking and driving will be considered a criminal conviction – same as a DUI

– You can grow up to four plants for personal use in your home

– Age of legal consumption is 19+ in Ontario

How does this affect my auto insurance?

Driving while impaired has always been illegal, and this includes cannabis. The police will pull you over if they suspect you are impaired and conduct a road side 12 step test. If you fail that test you may also be asked to use a road side saliva test, which is approved under bill C-46. This test can detect cannabis within the past 6-8 hours, but the reliability of these machines is currently being questioned. The charge while driving under the influence of cannabis is impaired driving – the same as drinking and driving.

Will it affect my auto insurance rates?

Insurance companies will keep a close eye on the effect cannabis has on their loss ratios. Rates may increase if they see a larger amount of losses due to impaired driving. The biggest effect will be if you are convicted of impaired driving, which will make insurance much more expensive and harder to obtain.

How will cannabis affect my home insurance?

Currently it is legal to grow cannabis in your home as long as you have 4 plants or less. The majority of insurance companies will allow you to do as the law allows. However, your policy may be voided if you grow more than 4 plants or start selling cannabis out of your home, even if you have a license. If you wish to start growing more you may consider other options such as commercial insurance. The same laws apply to rental dwellings, so please make sure you add a clause in your lease outlining cannabis use in the dwelling.

Will my home insurance increase due to cannabis?

Insurance companies have not stated asking if you grow plants in your home so it will not immediately affect the amount you pay. However, companies may start increasing their premiums if they see an increase in claims due to cannabis. It can result in an increase risk of fire if not set up properly.

Other things to consider:

– If you are purchasing a new home you still need to make sure it was never used as a grow op. Insurance companies still do not want to insure homes that were previously used as grow ops due to the large amount of mold in the majority of the homes, as well as the tampering with the wiring.

– There are limits on your insurance policy for the plants, equipment and paraphernalia. Check with your insurer to see how much you are covered for, as it may not be enough.

-If you rent, check with your landlord and your lease to see what is allowed in your dwelling.

If you are unsure about the ramifications regarding cannabis on your insurance please do not hesitate to call us at 905-623-4406 and one of our experienced brokers would be more than happy to help.