How the Feds’ pot plan could trigger home insurance claims

Canadian insurance claims professionals see social host liability issues at play when the federal government’s Cannabis Act comes into force.

“If somebody goes to a home where cannabis is available because the homeowner is able to grow four plants, and the driver leaves the home impaired, that becomes a social host issue,” says CIAA president Monica Kuzyk. “It’s the whole alcohol issue, but it’s cannabis, and it’s more complex.”

The Government of Canada is planning to bring its Cannabis Act into force by no later than July 2018. The government’s stated goal is to legalize, strictly regulate, and restrict access to cannabis to keep it “out of the hands of Canadian youth, and to prevent organized crime from continuing to profit from the illegal cannabis market.”

The Government of Canada website notes that Canadians continue to use cannabis “at some of the highest rates in the world.” In 2015, 21% of youth and 30% of young adults reported using cannabis within the last year,” the government’s backgrounder reads.

In a Q&A posted on the Government website, one question asks: Is the Government not concerned that cannabis produced at home would be more easily obtained by Canadian youth?

To which the government responds: “Small amounts of cannabis for personal use can be safely and responsibly cultivated by adults. Adults will want to take suitable precautions to protect children and young persons living in their home as they do now in storing prescription medicine, alcohol or other potentially harmful substances.”

But recreational use of marijuana in the home may trigger the liability coverage in home insurance policies, adjusters note. They foresee the same social host issues that arise when Canadians serve alcohol at home.

For example, if a person is stoned when leaving a house party where marijuana was served, and subsequently gets involved in a car crash, what is the host’s responsibility for getting them stoned in the first place? Adjusters will need to do “a very comprehensive investigation when they believe there is a social host issue at play,” Kuzyk says.

Potential questions for adjusters to ask include:

• Why was the claimant at the home?
• What was the homeowner doing when the claimant was in the home?
• Was there a party going on?
• Did the homeowner make cannabis available to guests?
• What was the consumption level at that point?
• Did the claimant bring their own cannabis, or did they smoke the homeowners’?

Some of what Canadian adjusters know about claims involving the recreational use of cannabis is based partly on networking with adjusters’ associations in the United States, where marijuana is legalized to a certain degree in some states. The non-medical use of cannabis is legal in eight states (Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington) and decriminalized in another 14 states (plus the U.S. Virgin Islands).

Anecdotal evidence from Colorado shows several situations in which people are unknowingly consuming products containing cannabis. An elderly woman, for example, had a hash brownie offered by a beauty salon. She went to the hospital thinking she was suffering from a stroke, only to have her emergency room doctor inform her that she was high. The woman took the beauty parlour to small claims court.

David Gambrill

David has twice served as Canadian Underwriter’s senior editor, both from 2005 to 2012, and again from 2017 to the present.