Canadians dazed and confused over legalized cannabis’ effect on insurance

Ratehub.ca
by Ratehub.ca August 29, 2018 / No Comments

With the legalization of recreational cannabis taking place on Oct. 17, 2018, Ratehub.ca set out to uncover how it impacts home and auto insurance in Canada. We conducted a survey of over 1,200 Canadian renters, landlords, and homeowners to gauge their understanding of how cannabis might affect what they pay for insurance, as well as their attitudes towards legalization.

We also collected data by generation, categorizing our respondents as Millennials, Generation Xers, and Baby Boomers. We classified Millennials as ages 18-34, Gen-Xers as 35-54, and Boomers as 55 and older.

The biggest takeaway from our survey? We found across the board, Canadians just don’t know very much about how smoking and growing recreational cannabis may affect their home insurance, renter’s insurance, landlord’s insurance, or auto insurance. Read on for the highlights.

Do you think home insurance and car insurance premiums will rise after legalization?

MILLENNIALS GEN X BOOMERS ALL CANADIANS
Yes 29.38% 31.60% 38.91% 32.56%
No 35.54% 24.12% 19.11% 27.04%
I don’t know 35.08% 44.28% 41.98% 40.40%

 

40% of all Canadians say they don’t know whether legalization will cause home insurance and car insurance premiums to rise, while another 27% say they don’t believe it will. However, 33% said they believe legalization will raise all Canadians’ home and car insurance premiums.

Canadians’ understanding of how cannabis may impact their insurance did not differ too much by generation. While Millennials were more likely to say they do not believe cannabis will impact insurance premiums, 1 in 3 respondents in every age group said they don’t know whether legalization will affect what they pay for insurance.

The reality is that insurers are still seeking to better understand the potential risks of having more Canadians smoking and growing cannabis. If the insurance industry perceives there to be an increased risk to homes and cars due to more people using cannabis, Canadian consumers will likely see the cost of auto and home insurance go up. If the potential for policy and price changes are a concern, don’t be afraid to shop around. You can get a car insurance quote and home insurance quote from Ratehub.ca today. 

If you are a renter or homeowner, are you planning to grow cannabis at home?

RENTERS HOMEOWNERS
Yes 13.35% 7.31%
No 71.93% 80.24%
Undecided 14.71% 12.45%

With the uncertainty around how cannabis may impact their insurance coverage, renters and homeowners seem to have adopted a wait-and-see approach when it comes to homegrown cannabis. It’s also possible that renters and homeowners are less interested in growing cannabis at home, given they may be able to buy it elsewhere. It’s certainly less work to purchase it than to attempt to grow your own.

Would your renter’s, landlord’s, or homeowner’s insurance policy cover damages related to growing cannabis?

RENTERS LANDLORDS HOMEOWNERS
Yes 4.17% 5.0% 1.08%
No 31.94% 28.0% 20.16%
I don’t know 59.44% 57.0% 78.76%


According to our survey, Canadians don’t know whether their renter’s, landlord’s, or homeowner’s insurance policy would cover any damages related to growing cannabis. At this time, insurers can refuse to pay cannabis-related claims, given that they’ve
stated growing cannabis can raise the risk of fire, electrical damage, mold, and burglary. For more information, read our blog post on how growing cannabis risks your home insurance coverage.

Canadians also don’t know whether they’re allowed to smoke or grow cannabis within their homes, even if federal legislation allows them to. In fact, 38% of renters said they weren’t sure if they’d be able to smoke in their units once cannabis is legalized, as they know their landlords may ban it in their leases, or their building management may ban it in their rules for tenants. Another 58% of renters said they don’t know if they have the right to grow cannabis.

Furthermore, 62% of landlords don’t believe tenants should be allowed to smoke inside. 59% will be placing restrictions on smoking inside their suites, while another 51% will restrict growing entirely.

Do you believe Canadians should have the right to grow and smoke cannabis in their rental units, regardless of any conditions set in their leases or in their building’s rules?

MILLENNIALS GEN X BOOMERS ALL CANADIANS
Yes 27.08% 24.29% 13.64% 24.43%
No 32.13% 30.00% 50.00% 33.95%
Only if they require cannabis for medical reasons 25.99% 26.43% 18.18% 25.05%
Undecided 14.80% 19.29% 18.18% 16.56%

 

About a third of respondents (34%) don’t believe Canadians should have the right to smoke and grow cannabis in their rental units. Furthermore, 32% of millennials, 30% of Gen-Xers, and 50% of boomers don’t believe one should have the right to smoke and grow inside their rental units – making this one of the biggest generational differences found within our survey results.

Do you feel that driving while high should be penalized in the same way as driving while drunk?

MILLENNIALS GEN X BOOMERS ALL CANADIANS
Yes 66.29% 75.26% 84.98% 74.36%
No, it should be penalized less harshly 24.83% 13.10% 5.46% 15.50%
No, it should be penalized more harshly 3.19% 3.53% 2.73% 3.22%
I don’t know 5.69% 8.11% 6.83% 6.92%

According to our survey, 3 in 4 Canadians feel that driving while high should carry the same consequences as a drunk driving charge. However, having an accurate test to measure impairment levels for cannabis is not as straightforward. 37% of Canadians were undecided as to whether current methods of roadside testing were accurate, especially given recent questions being raised in the media as to whether these methods are effective. Despite this, on August 28th, the Federal Liberals still approved the Draeger Drugtest 5000 which can’t test for impairment. They also pledged $161 million to police training and drug-testing equipment. Unfortunately, the Canadian Association of Chiefs of Police said they will not have the mandated 2,000 officers trained in time. Canada is doing its best to be ready ahead of legalization.

Do you feel roadside testing is an accurate way to measure someone’s impairment level while driving high?

MILLENNIALS GEN X BOOMERS ALL CANADIANS
Yes 30.52% 29.11% 38.57% 31.90%
No 35.31% 32.85% 22.18% 31.16%
I don’t know 34.17% 38.05% 39.25% 36.93% 


If you are caught driving while high on cannabis, will that affect your auto insurance premiums?

MILLENNIALS GEN X BOOMERS ALL CANADIANS
Yes 65.83% 67.15% 79.18% 69.58%
No 3.64% 2.29% 0.00% 2.23%
I don’t know 30.52% 30.56% 20.82% 28.19%

About 70% of Canadians understood drivers who are caught driving high can expect to see a substantial increase in what they pay for auto insurance. However, the reality is that once cannabis is legalized, car insurance premiums are likely to go up not just for those who drive high and are caught, but for all Canadians. Case in point – since Colorado legalized recreational cannabis, drivers have seen a 50% hike in premiums. To find out more, check out our blog post on cannabis legalization and its effect on car insurance.

With less than 50 days ahead of the legalization date of Oct. 17, there are still many questions and few answers around how cannabis will affect Canadians’ insurance. While the federal government is making cannabis more accessible to Canadians, many may be held back from recreational use at home thanks to limitations set by their landlords or concerns about how it may affect their insurance coverage.

At Ratehub.ca, we recommend you speak with your insurance provider, and that you take the time to understand the terms and conditions of your insurance policies. By understanding how smoking and growing recreational cannabis affects your insurance, you’ll be able to make better-informed decisions for your finances.

Photo by Alexandre Chambon on Unsplash