While cannabis legalization may be just over a month away, a new survey shows that many Canadian homeowners, renters and landlords don’t fully understand what it means for them.
Recent numbers released by financial website Ratehub.ca show that 40 per cent of all Canadians say they aren’t sure whether legalization will cause their insurance premiums to rise — with a split of nearly 33 per cent saying they do and 27 per cent saying they don’t.
“There is a lot of confusion with cannabis becoming legal,” Alyssa Furtado, co-founder and CEO of Ratehub tells Yahoo Canada Finance. “They don’t understand their rights around where they can smoke and whether or not they can grow it in their homes.”
She adds that for renters, the situation is more complex, because the landlord is also in the equation.
According to Ratehub, homeowners and renters have appeared to adopt a wait-and-see approach to growing cannabis at home due to uncertainty around how it might impact their insurance coverage.
The site found that nearly 60 per cent of renters don’t know if their insurance policy would cover damages related to growing cannabis.
“Because legalization is a new thing, existing insurance policies may or may not address it, and so Canadians rightly have questions as to what they are or are not allowed to do as it relates to their insurance, and then if they’re renting, how it relates to their lease agreement,” Furtado adds.
If you plan to smoke or grow cannabis in your home, Vanessa Barrasa, manager of media relations at the Insurance Bureau of Canada, says it’s vital to be open and forthright with your insurance company.
“It’s really important that you have a conversation with either your broker or your insurance company as to what are your needs and what it is you need in your policy,” Barrasa says. “When it comes time to the unfortunate event of having to make a claim, there’s no surprises for the person making that claim.”
Renters, landlords divided
The survey also shows a dramatic split between what renters and landlords believe about growing cannabis at home.
The financial site says that 28 per cent of renters polled believe that Canadians should be able to smoke and grow cannabis in their rental units even if their landlord or property manager forbids it. Of landlords polled, nearly 60 per cent said they plan to place restrictions on whether renters could smoke pot in their rental units.
Matt Hands, senior business unit manager for insurance at Ratehub, says renters could be out of luck if that’s the case.
“Most provinces are putting the power in the hands of the landlord to allow them to change their tenant agreements to basically put a ban in there for growing cannabis,” Hands says. “We’re seeing a strong push from the provinces to empower the landlords to put those bans and those restrictions in their tenant agreements.”
And Furtado says renters should look for amendments to standard leasing agreements that specifically mention cannabis.
Some provinces like Quebec have been more heavy-handed when it comes to restricting growing pot in homes, Hands says, and it will remain illegal to do so there.
Landlords in the province could even make changes to existing leases to ban renters from smoking pot, but in Ontario, landlords can’t make a change to a lease before it ends.
In more cannabis-friendly regions in Canada, like Ontario, the landlord still rules and some allow for landlords and property management groups to introduce restrictions in lease agreements or building rules.
“Ontario is saying, ‘You know what, if there isn’t a ban in place or if there isn’t a rule against this, if you’re a renter, go ahead and smoke and grow in your building,’” Hands adds.
“At the same time, if the landlords are taking the onus on and saying, ‘You know what, we don’t feel comfortable with that, we’re going to put a ban in.’ Well then unfortunately, if you’re renting, you have to follow the rules of your landlord.”
Impact on insurance up in the air
Considering that Ratehub found that 57 per cent of landlords said they don’t know whether their landlord’s insurance policy would cover damages to their rental unit related to growing cannabis, it may be a precaution some landlords are willing to take.
And for homeowners, legalization brings more uncertainty with 79 per cent saying they don’t know if their home insurance policy would cover damages related to growing cannabis and another 20 per cent say they believe their home insurance policy would not provide coverage.
The site says it’s unclear which insurance providers will allow Canadians to grow cannabis at home without voiding their coverage and that there’s uncertainty how insurers will account for the potential increased risks around legal cannabis in homes when pricing policies.
“It’s really a business decision that’s going to be made by individual insurers, so the pricing and the offering could be very different,” Barrasa says.
According to Ratehub, Canadians can brace themselves for higher premiums if the insurance industry perceives that there will be an increased risk due to more people using cannabis.
But Hands says it’s going to take time to see the full impact that legalization is going to have.
“Unfortunately, it takes data and it takes incidents to occur to see the full effect,” he says. “Every provider, every province treats risk in a different way.”