Home insurance premiums are case-by-case following marijuana legalization

Published: October 28, 2018

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Marijuana legalization in Canada has brought many changes to the insurance industry across lines. Customers who can now grow and light up pot may want to think about the insurance implications in their home and car.

Home insurance and auto insurance premiums are likely to rise with marijuana legalization finalized. The federal government’s Cannabis Act has been in effect since Oct. 17. Homeowner premiums will be dealt with on a case-by-case basis, says the Insurance Bureau of Canada (IBC).

Providers are having to change assessment frameworks to account for cannabis. Until now, home insurance companies assessed premiums based on prior experience. However, that is not possible with marijuana legalization now a factor.

“Insurance rates and premiums all are based on risk and experience, and we don’t know what that experience is going to be like once it’s legalized,” Vanessa Barrasa with IBC said earlier this month. “It’s not like, ‘oh, cannabis is legal, the next day all your insurance and home rates grow.’ It doesn’t work that way.”

A new insurance landscape means many providers are still working out their framework for pot.

“Every company is setting their own limits. It’s really important that if you have a material change – you now have cannabis plants, before you didn’t – that is something that you should inform your insurance company of and make sure, obviously, that you’re being truthful and honest,” she said.

Renters

Renters insurance is a little clearer to predict as Barrasa advises all renters to purchase tenant insurance. Not least because doing so will ensure personal property is protected. Whether an owner or renter, all people should abide by legal limits for consuming and growing cannabis, Barrasa warns.

“That would be specific to your tenant or home insurance policy. It’s important that you speak to your insurance to make sure that they’re aware of your contents and you know what your limits are,” Barrasa said.