Lawyer warns home insurance companies to change policy wording to specifically exclude cannabis

Published: August 30, 2018

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The federal government will introduce its Cannabis Act into law on Oct. 14, allowing Canadians to consume marijuana recreationally. However, many uncertainties remain around insurance, and one defence lawyer says home insurance customers may need new language within their policy.

Homeowners will be able to grow their own pot on premises, and insurers are weighing up the risk of potential fire or thefts from growth. Mouna Hanna, an insurance specialist defence lawyer with Dolden Wallace Folick LLP says home insurance companies should not consider the working of exclusion clauses in policies.

Hanna was speaking at the Canadian Claims Summit, which was held by the Canadian Independent Adjusters’ Association in Toronto.

Insurers already included exclusion wording in some existing home insurance policies. These exclusions protect the insurer from losses from growing marijuana. However, there are a number of carriers who do not include this working, but exclude losses from all drugs. Currently marijuana is illegal, so the broad wording works.

That will change with the Cannabis Act, as pot becomes legal home insurers will need to update their wording to be more specific.

“Fires are 24% more likely to occur in a home or dwelling containing a grow-op,” Hanna noted.

“There is also the increased risk of burglary, vandalism, water damage, mold and the list goes on.”