Growing concern: P.E.I. insurance company cautious about covering cannabis

An P.E.I.insurance company has informed itspolicyholders that it won't be covering any buildingswhere cannabis is grown unless the company can verify it isbeing done safely.

P.E.I. Mutual Insurance Company notified its customers of the policy in late February via mailed letters. The company said since cannabis legalizationit has experienced increased risk associated with cannabis being grownin both residential andcommercial buildings.

"I want to be clear we're not discriminating, we're not concerned about use, we're not judging that at all where we're concerned mostly about the safety aspect," said Blair Campbell,the company's general manager.

Since cannabis was legalized, the federal Cannabis Act allows up to four plants to be grown per residence for personal use.

"Coverage for buildings and their contents is excluded under P.E.I. Mutual policies where cannabis is cultivated, harvested, processed, manufactured, distributed or sold," the letter reads.

If people do want to grow in their buildingsandbe insured byP.E.I. Mutual, they have to let the company know.

The company said it will then send out an underwriter to verify the plants are grown in a way that is safe.If customers don't let P.E.I. Mutual know about the cannabis plantsand the insurance company finds out, their coverage will be void.

'Lives are at risk'

The company said it is primarily concerned about fire risksbecause of the heating and electrical components of growing, as well asexcess moisture involved which could causemould or water damage.

"With the electrical systems, they need to be properly set up by an electrician. If you're introducing heating systems they need to have a CSA or similar approval. And they need to be put to their proper use and not improperly modified," Campbell said.

He said it's not just about property loss and a dollar figure for the company.

"People can sometimes lose sight of the fact that, you know, they're introducing heating and and electrical systems that create these fire risks and lives are at risk," he said.

'Depends on how they're growing it'

Jeff Cooke, president ofCooke Insurance Group in P.E.I., sayscompanies have the right to decide what to insure. Those decisions can be guided by risk, but canalso be guided by thecompany's principles, he said.

"I've seen insurance companies on the commercial side say: 'No we won't do it. It just goes against our core beliefs.'"

While none of the companies Cooke works with are taking a similar stance on cannabis, heunderstands why some might.

"It's a little bit unknown yet you know,and I guess it depends on how they're growing it. You know, what type of heat lamps. Some may have it set up right, some people may use ad hoc systems. SoI guess certain companies may not feel completely comfortable in that process," Cooke said.

I don't really seeing it being a big issue. Jeff Cooke

Cooke said it's the special growing conditions that cannabis requires that set it apart from other plants that people might grown in their homes.

"Tomato plants normally just grow with natural sunlight, you know, you normally can hang a vine in the window or your little greenhouse and it's going to grow," he said.

Cooke said he thinksfear of unknown present and future risksmay make insurance companies shy away from cannabis.

But he said he thinks more companies will eventually become used to insuring cannabis operations.

"If you do things right, follow things right,I don't really seeing it being a big issue," he said.

Real estate concerns

Since legalization, some realtors say they've been coming across cannabis plants being grown in houses less often. Butthey still lookfor certain red flags.

"The things that we try to look for would simply be, does the air feel heavy?" said Mary Jane Webster, broker and owner of Remax Charlottetown.

"Mould sometimes, when not treated or taken care of,you can get a funny smell, so just a little kind of tidbits that we try to look for based on our past training."

But Webster saidmost times realtorssee plants that appear to be growing properly.

"If it looks good to us, then it's fine," she said.

Webster said before legalization, if cannabis was found growing in a propertyit would have been considered a stigmatized property and have to be disclosed to the buyer. She said agents are still disclosing it to would-be buyers just so they're aware.

"Some peopleyou knowjust haven't been exposed to it or haven't experienced seeing anything, so we just want to make sure that we don't come around a corner and see a greenhouse and all of a sudden, you know, a bit of shock value," Webster said.

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