And how does being a “medicinal” or “recreational” user affect your premiums?
Digital Journal | Excerpted article was written By KAREN GRAHAM
Vancouver – A recent court ruling in British Columbia, Canada that focused on the “material change” clause in homeowners insurance policies could have the potential to shed a spotlight on the incompatibility of such a position with new federal cannabis laws.
According to the Globe and Mail, The decision of Vancouver Supreme Court Justice Margot Fleming in February 2019 could very well have far-reaching effects for all homeowners in Canada who grow even a single marijuana plant inside their home.
Justice Fleming ruled in favor of Wawanesa Mutual Insurance Company after hearing evidence from the insurance company’s underwriting expert, Liz Strocel, retained by Wawanesa, on the risks of growing cannabis. Based on her testimony, a cannabis grow operation on a homeowner’s property constitutes a “material change” sufficient enough to void the insurance policy.
Strocel testified the company “did not and does not insure any property with a marijuana grow operation, whether or not it is legal, because of the inherent risk. She identified the risk as including drywall being susceptible to mold from the humidity, fire (for a number of reasons), the risk of robbery or a break in, and additional liability issues. She also testified that Wawanesa would void a homeowner policy if it learned the insured had a grow operation and refund the premiums.”
Surprisingly, the underwriting expert also testified that she was “not aware of any general insurer in Canada that would take on the risk of any cannabis grow operation, or even the presence of a single marijuana plant.” This one line of testimony was emphasized in the judge’s ruling.
The Schellenberg case
The Schellenbergs had a fire in an outbuilding on their property in Chilliwack, British Columbia in 2014. The outbuilding was constructed in 2012, with Mr. Schellenberg notifying the insurance company he wanted the building added to his homeowner’s policy. He apparently failed to mention he also had a legal cannabis grow license and the building in question housed the operation.
The failure of the Schellenbergs to tell their insurance company the building contained 310 marijuana plants was used by Wawanesa to void the homeowner’s policy. Wawanesa claimed that the marijuana grow constituted a “material change”—a change to the property that would have led to either higher premiums or denial of coverage if it had been reported.
The insurance company’s decision to void the insurance policy led to the Schellenberg’s suing the company, claiming it did not have grounds to void the policy. With the court ruling in favor of the insurance company, it remains to be seen if we may hear of more court cases involving homeowner insurance claims.
It might be a good idea if homeowners growing marijuana on their property, even just one plant, check with their insurance companies – just to be sure of their coverage.
Source: the co-operators
The Cannabis Act, also known as Bill C-45, came into effect Oct. 17, legalizing recreational marijuana. Here’s how this landmark decision affects your Home, Auto and Life insurance.
In all provinces except Manitoba and Quebec, you can legally grow up to four cannabis plants on your property for personal use. These four plants are treated the same as any other legal plant on your property and are covered under your Home insurance policy. If you illegally exceed the number of plants allowed in your province or territory, your claim may be denied entirely.
Household members who smoke cannabis aren’t eligible for our non-smoker discount.
Legislation introduced by the federal government improves roadside screening and implements new charges for driving while impaired by drugs, including cannabis. Driving while under the in fluence of cannabis is illegal and can result in increased auto insurance premiums. Learn more about the dangers of cannabis impaired driving.
If you use cannabis for medicinal purposes, you may be asked about your medical condition during the life insurance application process. While recreational cannabis use won’t impact your rates, heavy use could cause higher premiums or a declined application.
What else you need to know about cannabis
While it’s legal for adults to use cannabis in Canada, each province and territory has different rules. It’s your responsibility to know what’s legal and what isn’t in the province or territory where you live or visit, including:
- The legal age
- Where you can buy and use cannabis
- How much cannabis you can possess
For more information on the cannabis laws, visit the federal government’s Cannabis in Canada website.
‘I think the lines have blurred with medical marijuana’
Recreational Cannabis is officially legal in Canada and Falvey Cargo Underwriting is proud to announce its newest product offering of a customized, fully tailored solution of Stock and Transportation Insurance for the Canadian Cannabis industry.
Isabelle Therrien, Vice President of Falvey Cargo Underwriting
, is the designated Underwriter for this new offering. Therrien commented, “At Falvey Cargo Underwriting, we pride ourselves in offering a quality insurance product. Because of our expertise in the Life Science and Pharmaceutical field, the Cannabis industry is a natural fit for us. We feel we can bring our supply chain expertise to the table and work closely with the clients to ensure safe movement of the product.”
Mike Falvey, President and CEO of Falvey Insurance Group adds, “We’re excited to apply our specialization of Life Science, Pharmaceutical, and Government-Regulated Drugs to enter this new market.” Falvey Cargo Underwriting is a division of Falvey Insurance Group, founded by Falvey.
With greater capacity than any other local market, recognition as the industry’s go-to solution for Life Science products, and a proven track record of Underwriting and Claims, Falvey Cargo is prepared and excited to take the lead on underwriting transportation and stock insurance for the Cannabis industry in Canada.
About Falvey Cargo Underwriting
Falvey Cargo underwrites marine cargo coverage in three cargo industry segments: General Cargo, Life Sciences, and Technology. Founded in 1995, Falvey Cargo Underwriting has evolved into the largest cargo covernote holder at Lloyd’s of London, offering the highest capacity in the marine cargo market. Falvey Cargo has over 150 years of combined marine cargo underwriting experience, global reach with local expertise servicing clients around the world from offices in Rhode Island, California, Washington, Toronto, and London, and dedicated loss prevention, claims processing, and recovery services in-house.
About Falvey Insurance Group
Falvey Insurance Group began as a single division, Falvey Cargo Underwriting, opening its first office in 1995 in Wakefield, RI. After 20+ years, the company has evolved into Falvey Insurance Group, comprised of three divisions: Falvey Cargo Underwriting, Falvey Shippers Insurance and Safe Harbor Pollution Insurance becoming, “The Specialized Insurance Experts” in maritime coverage. Falvey underwrites on behalf of Lloyd’s of London, C.V. Starr, Berkshire Hathaway and Argonaut Insurance Company. The flexibility, proactive customer service, claims processing excellence, and comprehensive knowledge that Falvey companies are known for is unparalleled in the insurance industry.
The Co-operators Life Insurance Co. is introducing optional medical cannabis coverage for its largest group plan sponsors.
While the coverage can be added as an optional provision under an extended health-care plan, it requires prior authorization and is subject to an annual maximum.
The insurer will consider cannabis an eligible expense under a health-care spending account, as long as the plan member has met all the guidelines set out by Health Canada. It stipulates that, since medical cannabis doesn’t have a drug identification number, it isn’t eligible for coverage under a prescription drug plan.
However, the Co-operators will consider coverage for conditions where cannabis has been proven effective, such as chronic pain, nausea and vomiting related to chemotherapy and muscle spasticity associated with multiple sclerosis.
The Co-operators joins a growing list of insurers now providing options for group medical cannabis coverage, including SSQ Life Insurance Co. Inc. and Medavie Blue Cross.