October 17, 2018
Much hype has been given to the legalization of Cannabis in Canada for Recreational Use on October 17, 2018. Here is some important information on how it will effect you in Ontario and the impact on your Personal Tenant, Condo, Home and Auto Insurance policies.
Ontarians will be allowed to grow up to 4 Cannabis plants in their RESIDENCE. Additionally, individuals 19 and older residing in that residence can possess up to 30 grams of Cannabis for personal use. Up until now, Cannabis use for recreational purposes was consider Illicit and as such exposed individuals to Exclusions on their policies. Although the laws have changed and most insurers have updated their wordings regarding cannabis, you will want to speak to your Insurance Broker or Insurance Agent to confirm exactly how your specific Insurer will treat your Recreational Use. Do not take it for granted that all insurers will accept it.
Additionally, you want to ensure that you are properly covered for your cannabis. For instance, you want to make sure that you have the value of your cannabis covered on your policy should an insured event occur like fire or theft. Items inside of your residence would be covered under your contents limit and you need to make sure that you have the right limit for all of your belongings. Items outdoors would be limited by the coverage you have on your policy for Outdoor Trees, Plants and Shrubs. Typically your outdoor limits would range around $500 or $1,000. Each insurer will have a different limit and you want to make sure that you understand your exposure. This may also cause you to reconsider keeping your plants outside and moving them inside for greater protection.
The value of cannabis is pegged at around $7 to $10 per gram and $50 to $100 per plant.
3 individuals residing in the residence above the age of 19. Each is allowed to possess no more than 30 grams. They have 4 plants.
3 people X 30 grams X $10/gram = $900
4 plants X $100 = $400
Total of Cannabis that needs to be insured is $1,300.
Of course if you have additional items to assist in the growth of the plants, you should add these values to your limits with your insurer.
Condos and Tenants
Although this would seem LEGAL under this new law, many RESTRICTIONS are entering into the residential marketplace. For instance, many Condominium Corporations are passing By-Laws PROHIBITING the Recreational use of Cannabis on the property in its entirety. This would mean that even though you own your Condo, you would NOT be able to grow or smoke Cannabis in your unit or from your balcony. Every Condo Corp will have their own By-Laws and you need to make sure you understand what you can and can’t do. Contact your Management or Condo Board for details.
Similarly, Landlords are rewriting their lease agreements to EXCLUDE Cannabis from their properties as well.
In both cases, it’s not just the enforcement of these By-Laws and Agreements that you should be concerned with. If you are performing something that does not comply with laws you may be placing your insurance policies at risk. For instance, a fire claim may be denied if you are doing something like growing cannabis plants in a unit when you are prohibited from doing so. I am not a Claims Adjuster nor do I have any indication from Insurers that this would definitely happen in the event of this situation actually occurring. However, before you go down that road and make the investment, please consult with your Broker or Agent to make sure you get confirmation that it will be acceptable to your insurer.
Very similarly to your responsibilities when serving alcohol at a party that you are hosting, you will have these same obligations when cannabis is present. There is one big difference however. If someone attending your party and is NOT drinking, then they can’t get drunk. BUT, if someone is NOT smoking up, they could still get high from the smoke in the room. You will be held responsible if your guests cause or get into accidents as a result of getting high at your party. Develop a strategy to avoid this situation. Be extra vigilant in making sure that your guests are not driving and remain safe at all times.