Cannabis’ legalization is set to disrupt an age-old industry with questions about its use. The facts are thin, the reports are few but we’re here to help you best prepare for the changes ahead. While insurance companies race to enact policies to avoid confusion, are you ready?
The formerly illicit-yet-casual drug is soon to be on the shelf and part of the norm. It enters your daily life much in the same way as alcohol has and you need to be conscious of how it’s soon to be public presence will affect you. Whether you partake or not, it could have a significant impact on your insurance products. Here are some questions you may want to ask your current providers.
For your health & life insurance
Do you have coverage for medicinal marijuana?
Typically, with a bacterial infection, your doctor provides a prescription, you submit it to a pharmacy, and receive the antibiotics using your health benefits from your employer. It’s simple, it’s covered, there are no more questions.
Coverage for cannabis health products on the other hand isn’t as simple. Health insurance companies are wary of the high cost and efficacy relative to a proven and less expensive, pharmaceutical drug. Even though questions persist around cannabis’ medicinal effectiveness, some insurers are stepping up to the plate to offer conditional coverage options.
Sun Life covers marijuana for specific cases like pain from cancer, MS, or arthritis. Manulife offers the same coverage but instituted limits at $1,500 to $2,500 per year. It’s a good idea to inquire with your employer before you ask your doctor to ensure your suffering is managed. If your employer’s co-pay health benefits don’t cover it, you can ask to opt out of the plan but first, understand the repercussions, you don’t want to be without coverage when you need it.
The same rules apply for life insurance. A lot of companies have adjusted their policies to classify cannabis users as “non-smokers” since it’s believed to be less harmful than tobacco and there are more ways to consume than combustive smoking. If you’ve been classified as a smoker on your life insurance policy, and you only smoke cannabis, you should be asking for a reduction on your premiums. If you’re ingesting for pain, your life insurer may care less about the cannabis use and more about the cause of the pain, especially if it’s a new medical condition.
If you’re anxious about disclosing your desire for medical cannabis to your employer, shop around for life insurance quotes and a new benefit plan with the coverage you want. There’s no sense paying for coverage you can’t use.
Whatever you do, it’s essential to be honest. A breach of trust doesn’t need to be intentional, so if THC shows up in a requested sample, the policy could be voided for nondisclosure or fraud. Any factual misrepresentation gives the insurance company a right to terminate the policy.
For your car insurance
When Colorado legalized cannabis, the number of claims increased, and monthly car insurance premiums skyrocketed as a result. Ratehub.ca conducted a survey on the impending Cannabis legalization and its perceived effect on the insurance industry, which showed, among other things, over 74% of Canadians felt driving while high should be penalized much in the same way as drunk driving. If you’re wondering if you can smoke and drive without penalty, the answer is no.
If you’re medically licensed to consume and, in spite of the evidence, the police still issue a ticket, what happens? An impaired charge is a major conviction and your insurance premium will suffer massive increases and may even classify the driver as uninsurable. While there are many questions surrounding roadside testing and its effectiveness, it’s best to practice caution and have a designated driver or take a taxi.
Mind you, it’s possible to see an increase in your car insurance premium regardless of your relationship to cannabis. One of the factors insurers use to determine rates is the number of accidents in your area which is why shopping around for car insurance quotes is more critical than ever to keep your premiums low.
For your home insurance
Your home insurance coverage and premium could be affected the most by legalization, making it essential to communicate with your insurance provider about what’s actually covered under your current policy. For one, they may differentiate between recreational and medicinal purposes inside your home, so it’s important you’re clear about your intentions.
Are you protected if you smoke in your house?
Cannabis legislation allows for it to be consumed at your residence. Did you tell your home insurance provider that you don’t smoke when you signed the contract? If so, and you choose to smoke, you run the risk of voiding your contract, and being left without coverage, which could be disastrous if you need it. Unlike health providers, home insurance still views any smoking as a fire hazard.
What about growing cannabis in your home?
Under the legislation, you’ll be allowed to grow four plants in your house. The home insurance industry hasn’t made any official changes or statements around coverage for growing, and there are arguments about being misinformed, but they are starting to ask questions to better understand their risk when underwriting.
While small-scale, personal use operations may be no different than houseplants, it’s important to note your provider may not see it that way. Excess moisture or humidity, if not appropriately
ventilated, has the potential to cause damage, but unlikely for such a small amount. Ask them how they handle growing inside your home versus growing outdoors, so you better understand how you’re covered.
A real risk for homegrown operations is theft. In one case, in Hawaii, a woman had 12 houseplants stolen, and she valued her plants over $40,000. She was awarded a little over $8,000. How is value attributed to plants without an appraisal? You should ask your insurer how they might assign the cost to your plants. Ask about how a home alarm system may help reduce your premiums.
The other danger, much in the same way as alcohol is treated at a party, is your own liability. What if you have friends over and treat them to some of your homegrown product? What if you bake it into an edible cookie and a partygoer is unaware they are consuming cannabis? You are responsible and could be held liable if they drive home intoxicated oblivious to what is happening to them. Ask your insurer how they view these cases and protect yourself accordingly. You may even consider increasing your liability coverage if you intend to allow visitors to ingest your cannabis products on your property.
Providers may view cannabis in the home as high-risk, so it’s best to stay informed and keep your options open when not only comparing the price of your home insurance quotes, but also on what is actually being covered.
Remember, you need to ask the right questions. Don’t get caught with your head in the clouds. Act, don’t react. You should always pose questions to your providers to better understand their risks and your own ahead of Bill C-45. Until we have more information and understanding of the risks associated with legalized cannabis, an active user may be paying more without asking the right questions.