How Weed Affects Your Insurance Coverage—The Good and Bad News

Photo by Nico Escondido

These days, many of us are worried that our health insurance is going get snapped away from us by a confused man in the Oval Office, and his cohorts, who think being born is a pre-existing condition.

Now might be a good time to look at how our pot use affects our insurance policies, if we’re lucky enough to have any.

A personal finance expert, who published an article in US News, recently shed some light on the topic.

First pointing out what we already know—weed is a Schedule I substance and illegal under federal law—Laura Adams tries make sense of the muddy waters.

Adams, who notes that the insurance industry is adapting on a state-by-state basis, has some useful general information.

Let’s Start with Auto Insurance

As we also know, scientists and researchers have been hard pressed to come up with a mechanism for determining how stoned is too stoned to drive. Why? Because THC is fat soluble, whereas alcohol dissolves in water, and that changes everything.

While there is no equivalent breathalyzer test for weed, if you get charged with a DUI for stoned driving, you will most likely see a huge spike in your insurance rates or get dropped altogether.

Home Insurance

If your weed is stolen or gets damaged from fire or water, are you covered?

Adams says the answer isn’t simple.

Some home insurers protect you from marijuana loss in states where both MMJ and recreational weed are legal. It can be viewed like any of your other belongings and be covered against certain threats, such as fire, theft and windstorms.

Even pot plants can be covered if you’ve got a state license and don’t exceed legal limits. However, the amount you can claim for missing or damaged marijuana is unclear and could require negotiation with your insurer. That sounds like fun.

In states with low possession limits (like a couple of ounces), insurers are less likely to push back and fight weed-related claims that could be less than $1,000.

Renters Insurance

If you possess weed and have renters insurance, you’ll get the same protection as home insurance, as long as it’s legal.

Health Insurance

Because weed is Schedule I, you can’t claim the cost of medical marijuana for reimbursement, nor can you buy it, with your heath insurance. Maybe someday.

Life Insurance

Smoking cigarettes is a major red flag for life insurers for the simple reason that tobacco causes one in five deaths in the United States per year, according to the U.S. Centers for Disease Control and Prevention.

An insuranceQuotes study found that smokers often pay as much as three times the amount non-smokers pay for term life insurance.

Some insurers treat marijuana differently and may not consider stoners as risky as tobacco users. Since life insurance rates are mostly based on your age and health condition, the underlying medical reasons for why you use cannabis in the first place are what insurers may find the most relevant and take into account.

However, some life insurance companies may treat pot the same as  cigarettes. Adams says the insurer would look at how much and how frequently you smoke weed. But, do they actually ask? Do we actually tell?

Business Insurance

If you run a legal business in the marijuana industry, coverage for liability or workers’ compensation may be difficult to get, or may come with high premiums because the industry is so new and insurance companies don’t have much experience yet to draw from in order to fully understand their own exposure to risk.

However, says Adams, once carriers have more data and confidence in the legal ramifications of defending marijuana business policies, more companies are likely to enter the market and offer competitive rates.

Her final word of advice: “If you use marijuana or work in the business legally, make sure your insurance agent or company knows, so they can help protect you. If you don’t disclose your situation or have the right coverage, you might have an unexpected premium hike or loss.”

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