Home insurance set to grow with marijuana plants

May 7th, 2018  |  Canadian Business

Home insurance policies could be set for some changes, as new laws surrounding Cannabis regulation come into play this summer. As federal legislation approaches, the Ontario Real Estate Association (OREA) wants a provincial registry of homes that are classified as grow-ops for what they caim is the protection of home buyers. However, with new laws allowing for personal and recreational growth, this could see premiums grow to new heights.

"It's happening already," said Alex Rea, vice-president of Homegrown Hydroponics Inc., which supplies equipment to both small hobbyist indoor gardeners and large licensed producers of medical marijuana. Rea told CBC that he has already heard of legal medical cannabis growers suffering hefty premium increases or even: "They get a letter in the mail saying, 'Hey, we cancelled your policy because you are a cannabis person,'" he said.

The request from the OREA suggests that properties are damaged or at risk when tenants choose to grow cannabis-usually in relation to moisture.  According to Steve Kee of the Insurance Bureau of Canada, questions about home-grown marijuana are just a by-product of the changing times. "They just want an accurate idea of what you're doing and any risk factors that should go into determining your premium,” he said. Much like insurers asking about other determining factors, such as how expensive your possessions are, how far you like from a fire hydrant, and whether you own a risky animal, Kee says these new cannabis related questions are just standard procedure.

"You're going to see this more and more when you take out a homeowner or tenant policy," said Kee. "They're going to underwrite your policy based on a number of factors. It's just another factor that gets consideration when setting an insurance premium."

For those renting, growing marijuana runs a huge risk if their actions aren’t in line with the landlord’s insurance policy-especially if the homeowner isn’t aware of the plant’s growth. It is crucial to be honest with your insurer about what your plans are for your home, to ensure you are appropriately covered. Similarly, tenants should let their landlords know if they intend on growing a personal plant.

Rae, however, is not convinced. He believes with the right precautions in place, growing cannabis at home is no riskier than growing any other plant: “There's a lot of noise about how dangerous cannabis production is — a toaster can be used improperly and start a fire.”

"It's just based on stigma and misinformation," he continued. "They are trying to say that cannabis production is inherently dangerous and destructive. It tars everything with the same brush when there's no evidence that, just because there was a cannabis plant there, that there was any damage."

These policy changes are just another regulatory adjustment since the announcement that marijuana will be legalised for recreational use. Laws surrounding impaired driving have seen similar changes, with police gaining more power when they suspect a driver is under the influence.