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How legal Cannabis use could impact your insurance

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A grey area New criteria for Cannabis and Tobacco Check your home insurance policy
It might be an opportunity to revisit their policies and save money.
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Here’s an important public service announcement for those who consume cannabis: once the drug becomes legal this October, give your insurance provider a call.

As the date for federal legalization draws near, so too is clarification for policyholders that use the drug for recreational and medicinal purposes, who may be wondering how this will impact their life, home, and critical illness coverage.


A grey area

Prior to legalization, the use of recreational cannabis was decidedly non-grata among insurers; admitting to its consumption could void home flood or fire coverage, or bump a policyholder up to a higher-priced smokers’ policy.  

Much of this is changing in the wake of Bill C-45 (the Cannabis Act), as some insurers are starting to reclassify cannabis use, says Scott Loney, head of insurance at Planswell – but as each takes a different stance on the associated risks, it’s important that policyholders seek out the right fit.

“It is kind of a grey area, and every insurance company treats it differently,” he says. “A lot of insurance companies are slowly catching up with the times in viewing marijuana as having no risks associated with the premium and longevity of life expectancy or critical illness… It adds a level of complication in the sense that we now have to shop around.”

He adds that, without a concentrated campaign by insurers to inform consumers, some may not realize that they may be eligible for a lower premium should they switch to a provider with a more favourable view on cannabis.

“It might be an opportunity to revisit their policies and say, ‘I can save money here by taking it to another insurer,’” he says.


New criteria for Cannabis and Tobacco

One of the biggest changes from a health perspective, Loney says, is that some insurers are no longer classifying marijuana consumption as having the same risks as tobacco use, which may greatly reduce premiums for some policyholders. He cites a recent application for a client who, with one insurer, was being rated heavily for marijuana use, resulting in significantly higher premiums.

“We were able to take that to another insurer, Manulife, and they were able to look at that and say, ‘Based on marijuana use, we don’t see any additional risk in this’,” he says. “As long as there’s no nicotine mixed in, or there’s no nicotine use, different insurers view that so differently.”


Check your home insurance policy

The Cannabis Act doesn’t just legalize the consumption of the drug – as of October 17th, Canadians will be able to cultivate their own plants at home, to a maximum of four.

Unlike the life and critical illness insurance industries, however, the consequences from a home insurance prospective are still hazy. It’s just as important for those who plan to grow their own pot to reach out to their prospective insurers to confirm their policy allows for home cultivation, and that aspects of their coverage, such as fire and floor insurance, won’t be voided.

One particularly grey area is just what constitutes a grow-op in a post-legalization Canada; currently, no legal definition currently exists, meaning even those who grow the allowed amount of the plan could risk stigmatization from their insurer. In extreme cases this can even impact the resale value of a home; buyers tend to avoid homes labelled as grow-ops, and mortgage providers are hesitant to provide financing for properties that are hard to insure.

However, it’s highly anticipated that some of the more competitive insurers will unveil new products to take home cultivation into account says Pete Karageorgos, director of consumer and industry relations at the Insurance Bureau of Canada. He stresses that those who plan to grow at home should review their policies in depth as of October.

“Once the legislation is introduced and passed, it makes sense that any homeowner sits down and contacts their insurance representative and makes sure what they have makes sense for them in coverages,” he says.

Penelope Graham is the Managing Editor of, a leading real estate resource that combines online search tools and a full-service brokerage to empower Canadians to buy or sell their homes faster, easier and more successfully. Buyers can browse homes for sale across the nation, including the Toronto, Vancouver, Calgary real estate and Edmonton real estate markets.


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