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Thinking of growing cannabis in your apartment? Here's what you need to know about legalization and your insurance

The day many have been waiting for is here. On October 17, 2018, cannabis became a legal substance in Canada and the possession and growing of it was decriminalized. But legalization is leaving tenants and landlords a little dazed and confused.

A survey on the subject shows Canadians are unsure of how legalized cannabis could affect their tenant insurance, car insurance or landlord insurance. The survey shows that 40% of Canadians say they don’t know whether legalization will cause home insurance and car insurance premiums to rise. A third believe legalization will raise all Canadians’ home and car insurance premiums.

While there is uncertainty from the public, the insurance industry itself is monitoring and adapting to cannabis as more information becomes available.

As with all insurance premiums, risk is the key factor in determining rates. Insurance companies look at historical data to help guide what policies they’re going to offer, and the coverage limits they contain. Director of Media Relations with the Insurance Bureau of Canada, Steve Kee, has been quoted widely in the mainstream press saying insurers will want to have as accurate data as possible before issuing or renewing policies for tenants and landlords. As more questions come up about homegrown marijuana, the answers will become more routine, and the policies more standardized, he says.

If the insurer does see an increase in risky behaviours or actions in relation to cannabis, tenant insurance quotes and car insurance quotes may rise. On the flipside of that coin is life insurance quotes, which may not be affected as most insurers slowly move marijuana use out of a high-risk category of activities.

Still, in most jurisdictions, tenants must behave in without risking the safety of themselves and others, and in ways that do not hinder other tenants’ reasonable enjoyment of their units, or with the landlords’ rights and rules.

Even before cannabis was legalized, landlords could, and still can, institute rules that stop risky behaviour. Individual buildings, especially in common areas and near front doors, regulate smoking tobacco.

As for cannabis, landlords can put in rules on things including:
• fire risk (use of grow lamps)
• damaging the building (high levels of humidity)
• interfering with other tenants (such as smoke and smell of cannabis)

Quebec’s new cannabis act, for example, is the strictest in the country giving landlords the right to change signed leases to ban tenants from smoking pot. Landlords there have 90 days to make changes now that cannabis is legal.

So far in Ontario the rental laws have not changed and perhaps tenant insurance quotes will also remain unchanged – for the time being. Other provinces also give landlords the right to prohibit smoking cannabis under existing leases or possession, in some cases.

There is still time for the rules to make their way through the system, but tenants should be vigilant to know what their individual building policies are and how their tenant insurance and/or car insurance quotes may change as the rules settle in.

If recent history is correct, insurance experts tend to agree we will see a rise in premiums. Elsewhere in the world, post legalization some premiums went up; there is a precedent. New rules and policies will be implemented as the insurance industry adapts to the actions, claims made, and costs associated with cannabis.


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