How legal Cannabis use could impact your insurance

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Here’s an important public service announcement for those who consume cannabis: once the drug becomes legal this October, give your insurance provider a call. As the date for federal legalization draws near, so too is clarification for policyholders that use the drug for recreational and medicinal purposes, who may be wondering how this will impact their life, home, and critical illness coverage.

A grey area

Prior to legalization, the use of recreational cannabis was decidedly non-grata among insurers; admitting to its consumption could void home flood or fire coverage, or bump a policyholder up to a higher-priced smokers’ policy. Much of this is changing in the wake of Bill C-45 (the Cannabis Act), as some insurers are starting to reclassify cannabis use, says Scott Loney, head of insurance at Planswell – but as each takes a different stance on the associated risks, it’s important that policyholders seek out the right fit. “It is kind of a grey area, and every insurance company treats it differently,” he says. “A lot of insurance companies are slowly catching up with the times in viewing marijuana as having no risks associated with the premium and longevity of life expectancy or critical illness… It adds a level of complication in the sense that we now have to shop around.” He adds that, without a concentrated campaign by insurers to inform consumers, some may not realize that they may be eligible for a lower premium should they switch to a provider with a more favourable view on cannabis. “It might be an opportunity to revisit their policies and say, ‘I can save money here by taking it to another insurer,’” he says.

New criteria for Cannabis and Tobacco

One of the biggest changes from a health perspective, Loney says, is that some insurers are no longer classifying marijuana consumption as having the same risks as tobacco use, which may greatly reduce premiums for some policyholders. He cites a recent application for a client who, with one insurer, was being rated heavily for marijuana use, resulting in significantly higher premiums. “We were able to take that to another insurer, Manulife, and they were able to look at that and say, ‘Based on marijuana use, we don’t see any additional risk in this’,” he says. “As long as there’s no nicotine mixed in, or there’s no nicotine use, different insurers view that so differently.”

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