Will Cannabis Legalization Impact Insurance Rates in Canada?

Now that cannabis use is legal across Canada, many people are wondering what impact, if any, the legalized pot will have on auto insurance and home insurance. Here is a breakdown of what we know in the infancy stage of cannabis legalization.

Cannabis & Auto Insurance Rates

As with anything that increases the likelihood of being involved in an accident, such as distracted driving or driving while under the influence of alcohol, fines and penalties for driving while under the influence of cannabis will be severe.

The fine and driving penalty will be the least of a person’s worries. If someone is injured, you will be held responsible for your actions in a court of law. Financially, your car insurance rates will increase significantly, as many insurers are classifying driving under the influence of cannabis as a major offense (the same category as DUI and distracted driving).

There are some worrying numbers being reported on cannabis use and how frequently cannabis users in Canada admit to operating a vehicle within two hours of using cannabis. A recent Statistics Canada survey found one in seven cannabis users that have a Canadian driver’s license admit to operating a vehicle within this two hour time frame.

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In the immediate future, there will not be a flat rate increase to auto insurance premiums based solely on cannabis legalization. Insurers will be closely monitoring driving and accident trends since legalization and make appropriate changes once they have sufficient data. That said, as mentioned previously, cannabis users caught operating a vehicle under the influence will immediately face stiff penalties from insurers and Canadian law for their actions.

Cannabis & Home Insurance Rates

Canadians are now legally allowed to grow up to four cannabis plants in their place of residence. If you grow cannabis plants in your home, you need to let your insurance broker know. Your insurance company will need to approve of your growing up. If they do not approve and you have a claim, your claim could be rejected by your insurance company.


Often, people growing cannabis in an indoor environment will alter heating and/or electrical properties in their home to create optimal growing conditions. These alterations will lead to an increased likelihood of a home insurance claim. On top of that, fumes can build up in the home’s ventilation system, which can cause mold buildup which could lead to an insurance claim.

Again, if you choose to grow cannabis, reach out to your insurance broker or company so they can notify you of the impacts this has relating to your home insurance policy.

As with auto insurance, insurers will not do a flat increase across the board to home insurance premiums to accommodate cannabis legalization. Rather, they will closely scrutinize data and make a more informed decision at a later date.

‘’The insurance landscape is definitely changing in Canada post-cannabis legalization,’’ Matt Alston, COO of Surex Direct, said. ‘’Insurers will need to alter the wording in both car insurance and home insurance documents to account for legalization. Over the next 3-5 years, at least, the correlation between cannabis and claims will be under a microscope -- and rightfully so.’’

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