At Switch Insurance, we get many different types of questions about how different things can impact insurance coverage. One of the more recent concerns centres on recreational cannabis use. Now a controlled substance in Canada, there are things that cannabis users need to know about their insurance coverage before lighting up!

A Brief Overview of Legal Cannabis in Canada

Did you know that cannabis is one of the most widely used substances in Canada? Nearly half of Canadians have reported using it at some point in their lives. Canada became only the second country in the world to legalise the sale, possession, and non-medicinal use of Cannabis in October of 2018. For the previous couple of decades, Cannabis had been legal only as a properly prescribed medication.

The legalization of Cannabis came with the establishment of the Cannabis Act, which identifies three primary goals:

  1. Keep cannabis out of the hands of youth
  2. Keep profits out of the pockets of criminals
  3. Protect public health and safety by allowing adults access to legal cannabis

It is the responsibility of the individual provinces and territories to determine how cannabis is distributed and sold within their respective jurisdictions. What’s more, each of the provinces or territories also have the flexibility to put additional restrictions in place, including specific limits on possession, public use, personal cultivation, public use, and minimum age of use (much as it is with alcohol at present.)

How Does This Impact Insurance Coverage?

With any new law comes questions about how that law impacts how things are done currently. People are indeed asking what new concerns related to Personal and Commercial Insurance coverage are potentially impacted by the legalisation of cannabis in Canada. In fact, there are several ways that insurance coverage considerations come into play. Here are five things to consider with regards to insurance and cannabis usage.

1.     Law and Order

Something to remember is that a legal substance like cannabis is controlled. The laws governing its use and distribution can be broken, with some very unfortunate consequences as a possible outcome. Breaking your local laws could very well result in insurance-related consequences for policy holders, such as a denied claim, cancelled coverage, or even an increase in insurance premiums.

While recreational cannabis use has been legalized across the country, specific laws around possession limits, legal age, where cannabis can be sold and used, and how much cannabis you can grow at home vary by province. As with any federal and provincial laws, breaking cannabis laws can result in charges from police. Breaking laws can also have a negative impact on certain insurance considerations: it could result in a denied insurance claim; the cancellation of specific insurance coverage; or even increased insurance premiums.

The exact laws will differ for each province and territory, so insurance holders who choose to use recreational cannabis should stay informed on local laws when travelling outside of their home province. This is a common refrain at SWITCH Insurance: always stay informed!

2.    Coverage of Plants and Paraphernalia

Since cannabis became legalised in Canada, the term “illegal grow-op” has virtually disappeared from the country’s vocabulary. Within specific limits as to the number of plants (for example), individuals can now grow cannabis legally in their place of residence. What many fail to realize is that personal home or tenant insurance policy may now be able to cover plants and paraphernalia associated with growing cannabis at home.

For people who do grow cannabis plants in their homes, there might be some new things in their private residence that they will want to protect in the event of an emergency. Thankfully, a person’s home insurance policy could cover their legally-owned plants and paraphernalia; however, like other specialty belongings, this coverage will likely be subject to special limits set out by individual insurance providers.

3.    Let the Driver Beware

Make no mistake: it is illegal to drive a motorized vehicle under the influence of cannabis. Infractions of this law will be dealt with as seriously as those for driving under the influence of alcohol. As it is with alcohol, there are specific laws that spell out the legal limit for how much cannabis can be in someone’s system while driving. These limits will depend on a variety of actors, including the driver’s age, class of driver’s licence, and other factors.

A conviction for driving under the influence (DUI) could result in the convicted individual’ car insurance policy being cancelled. At the very least, a driver convicted of driving under the influence would see a significant increase in their insurance premium. Likewise, if an individual is involved in a collision resulting in a DUI conviction, an insurance claim resulting from the accident could be denied, leaving the driver financially responsible for any repairs and other costs.

4.    Home Improvement

SWITCH Insurance has helped many clients connect with insurance providers to identify and mitigate risks associated with making changes to personally owned homes. Did you know that modifying your home or installing new appliances for the express purpose of improved cannabis plant growth could very well increase the risk of experiencing a fire or other damage? Insurance providers have the right to cancel coverage or deny a claim as a result of any home improvement that increases the likelihood of fire or damage. As with any major change you make to your home, it is always a good idea to communicate the planned changes with your insurance broker so they can ensure the right coverage is in place and inform you about any possible issues or negative impacts to insurance coverage or premiums. Personal Insurance holders who were considering making modifications to their homes in the hopes of improving cannabis plant growth might find out that, for insurance purposes, natural is the way to go!

5.    Party On – Responsibly

If someone is hosting a party and chooses to share legal cannabis with their guests, the host’s responsibilities are the same as if they were serving alcohol. Unfortunately, accidents do happen; a gracious host could find themselves with a lawsuit on their hands if one of their guests injures themselves. In addition, a guest could have an unexpected reaction to cannabis—potentially even a serious allergic reaction—which could lead to a liability claim. The host could also be held legally responsible if a guest who attended the party then drives away under the influence and gets into an accident. Much as with alcohol, your role as a host should be to make certain your guests enjoy themselves responsibly. That means not allowing guests to drive under the influence of cannabis. Arrange taxis or designated drivers ahead of time, or plan to have guests stay overnight, to make sure everyone looks back on your party fondly.

For recreational cannabis users, October of 2018 provided a newfound sense of freedom. Canadians are now using cannabis in a manner very similar to alcohol. Much as individuals have been able to brew make wine and beer at home for personal use, people are able to grow cannabis themselves for personal use. Legalization is still relatively new in Canada. Because of this, there remain plenty of unknowns about how using and growing cannabis will impact Canadian insurance policies. At SWITCH we work with our clients to make certain that they have access to the right Personal Insurance providers and the most up-to-date information. Be aware of the laws surrounding cannabis use and the consequences related to breaking those laws; understand what can be covered by homeowner’s insurance; and be a responsible user of cannabis if you choose to partake. If you have questions about how your own personal cannabis use could impact your insurance coverage, be sure to speak to your insurance broker directly.

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