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Growing Even a Single Legal Cannabis Plant in Canada Could Mean Your Home Insurance is Void

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A recent court ruling could mean that legally growing even a single marijuana plant in Canada could void your home insurance.

An underwriting expert who testified in a recent court case said he 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.” If this is true, that could mean big trouble for for anyone looking to exercise their right to legally grow a small number of cannabis plants. Potentially, homeowners who grow even a single marijuana plant could see their home insurances voided — even if claimed losses had nothing to do with the plant.

The expert’s claims come from testimony he gave in a case involving a fire that broke out at a family cannabis farm on Canada’s west coast.

The Schellenberg family began operating a small-scale cannabis farm back in 2012 on their property in Chilliwack, British Columbia. The whole site was above board, with the family obtaining all the proper licensing and following the local regulations. However, the Schellenbergs hit a snag when the outbuilding they grew their cannabis in caught fire in 2014. While the family had alerted their insurance company that they had the outbuilding, they did not mention that the building contained 310 cannabis plants.

Their failure to tell their insurers about what was contained in the building was ultimately used as grounds to void their policy. The insurance company 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 Schellenbergs then moved to sue their insurance company, claiming it did not have grounds to void their policy. They argued the insurance broker was negligent for not asking what was in the building and ensuring the family was adequately covered. This claim was recently dismissed by a judge who found that the insurance company was within their right to void the Schellenberg’s insurance policy.

While the court’s decision is not particularly surprising, some of the smaller details in the case are. One of the key factors in the judge’s decision was the testimony of the insurance company’s underwriting expert.

It will have to be seen if any insurance do go so far as to void an individuals home insurance based on the presence of a single cannabis plant. Still, homeowners may want to exercise extreme caution in the interim and inquire with their insurance provider about their policy towards cannabis growing.

h/​t The Globe and Mail

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