Legal or Not, Growing Marijuana Risks Your Home Insurance

Kayla Reyes
by Kayla Reyes March 9, 2017 / No Comments

It may be legal to grow “a limited amount” of your own medical marijuana plants if you have a license, but it doesn’t mean you should invest in hydroponic lights and turn the attic into a grow-op. Other than the gardening difficulty it presents, it could cost you — or your landlord — your home insurance.

One man in Kamloops, B.C., for example, learned his tenant was growing dozens of medical marijuana plants in the apartment, CBC reported last month. Though the tenant had a license that let him grow up to 60 plants without his landlord’s permission, the landlord’s insurance provider cancelled coverage as soon as it found learned about the operation. The insurer explained that it was concerned about safety features, not about legality.

Even if they hadn’t previously cancelled coverage, insurers could refuse to pay a marijuana-related claim on the grounds that growing marijuana significantly alters the risk for damage, which they hadn’t agreed to insure.

And fair enough: marijuana growers often modify the heating and electrical systems in the building, which can increase risks for fire and electrocution. The Fire Chiefs’ Association of B.C. has said grow-ops, both legal and illegal, are 24 times more likely to catch fire than a regular house.

Plus, changes to ventilation systems — which are frequent — can cause poisonous fumes to build up inside the house and cause mould or fungus to develop. The fumes could also be released outside and put neighbours and passersby at risk.

Growing medical marijuana can also heighten your risk of theft. There’s a reason why professional production facilities have extremely high security, from pressure centres that can detect if someone is trying to tunnel into vaults to tracking where employees are at all times. But while home growers could booby-trap their operations to deter thieves, they could put them at risk of liability claims.

While properties that host grow-ops can be remediated, it can still be difficult to find home insurance for them. That’s because moisture, pesticides and fertilizers, which soak into the building’s structure, can have long-term effects. Similarly, there could be a mold problem that hasn’t yet been made apparent, or criminals could still target the property because they think they could still find drugs on site. Most insurance providers, therefore, consider these properties to be high risk or substandard, and will charge accordingly.

Remediated grow-ops can also be difficult to buy or sell. Difficulty getting insurance can lead to difficulty getting a mortgage, and even with coverage, banks may still consider the investment to be too risky. A property’s past life as a grow-op can also make it harder to sell it, since many prospective buyers don’t want to assume such a risk either.

Last summer, for example, a couple in Mission, B.C. received an offer on their home that was nearly $100,000 over asking price. But the buyers conducted a quick search with the local fire hall and learned public officials had searched the home six years before and found evidence of a possible grow-op. They rescinded their offer immediately, even though no charges were ever laid.

To estimate your insurance costs, get a home insurance quote.

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Flickr: Mark