Does home insurance cover cannabis? The answer may infuriate you

A new study has found that homeowners insurance does not cover marijuana, even if you smoke it in your own home.

Home insurance is a policy that typically covers the building and the property in which it is located. Many homeowners in states where cannabis has been legalized have begun to wonder if their homeowner policies cover cannabis.



While cannabis is still classed as a very hazardous narcotic by the federal government, it is undeniably huge business.

Cannabis is one of the country’s fastest-growing businesses, with sales reaching a new high of $17.5 billion last year, up 46 percent from the previous year. Because an ounce of marijuana may cost hundreds of dollars, you might be curious whether your house insurance would cover you if your marijuana was stolen or damaged. Why should cannabis be excluded from most regulations that protect trees and houseplants?

To say the least, the present scenario is complex — and after you discover the truth about your insurance, you may decide it’s time to shop around for a better one.

What expenses will be covered?

First and foremost, any medical or recreational cannabis you want to safeguard must be lawful for you to possess.

The courts decided in the 2011 case of Barnett v. State Farm that State Farm had no duty to cover plants confiscated by police for being in excess of the California legal limit.

Your homes insurance policy may protect you in one of two ways, assuming your friend is trustworthy:

Protection of personal belongings

This kind of insurance will cover the cost of replacing all types of stolen or destroyed goods, such as furniture, electronics, art, jewelry, and other valuables.

Coverage limitations for various kinds of goods will be listed in your insurance. According to the Insurance Information Institute, coverage for trees, plants, and shrubs is typically limited at about $500 per item.

The difficult part is finding out how your insurance provider would categorize your belongings and determine their value.

Tracy v. USAA was a 2012 case in which the insurance provided $8,800 to compensate the loss of 12 medicinal marijuana plants, much less than the $45,600 sought by the owner. The owner sued, but the courts decided that since cannabis is still illegal in the United States, USAA had no duty to compensate him.

Liability insurance

This kind of insurance protects you against lawsuits stemming from injuries or property damage you cause to others.

If your insurance contains the proper coverage — and cannabis usage isn’t prohibited — you may be shielded from expensive expenses if someone overindulges at your home during a party.

Liability limitations often begin around $100,000.

Why isn’t legal marijuana usually mentioned?

Many insurance companies refuse to cover cannabis because it is still classified as a Schedule 1 substance by the federal government, which means it has “no presently recognized medicinal value and a significant potential for misuse,” similar to LSD or heroin. This is especially relevant if the insurance operates in several states. As a consequence, marijuana plants and products are often banned from homeowner’s insurance plans.

Even if an insurer is prepared to cover cannabis, publicly admitting it is uncommon. When Allstate assured Colorado consumers that they were in excellent hands in 2014, it made news.

Despite the apparent unease of most insurers, it’s worth attempting to file a claim if your legal marijuana is stolen or destroyed.

Because the possession limitations in many states are so low, it’s conceivable that your business won’t bother to defend your claim. In addition, some states, like Oregon, have enacted legislation making it unlawful to refuse to fulfill a contract because cannabis is illegal under federal law.

How can you make sure you’re safe?

Insurance companies will change as cannabis laws change. In the coming years, providers are likely to be less circumspect about whether or not your cannabis is covered.

For the time being, the most straightforward method to determine if your insurance is on your side is to review your particular policy — or, better yet, contact the business and inquire.

If you don’t receive a clear response, or if you don’t get one at all, it may be time to transfer insurers.

In any case, comparing house insurance plans is a smart idea since you may find substantial discounts with a different carrier. Every six months, the Insurance Information Institute advises shopping around for better rates.

If it’s been a long time since you compared estimates, you may be overpaying by $1,000 or more on your policy. Car insurance is the same way.

Even if your insurance covers cannabis, it’s worth spending a few minutes to double-check that you’re paying a reasonable amount for the coverage you’re getting.

This material is for informational purposes only and should not be taken as advise. It comes with no warranties of any sort.

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