While cannabis is still classified as a highly dangerous drug on the federal level, there’s no denying bud is big business.
Cannabis is one of the fastest-growing industries in the country, with a record $17.5 billion in sales last year, up 46% from the year before.
Since an ounce of marijuana can cost hundreds of dollars, you may be keenly interested to know whether your home insurance would protect you if your cannabis was ever stolen or destroyed. After all, most policies cover trees and houseplants, so why not cannabis?
The current situation is complicated, to say the least — and once you learn the truth about your policy, you may decide it’s time to look for a better one.
What costs can be covered?
First off, it’s important to note that any medicinal or recreational cannabis you’re hoping to protect has to be legal for you to own.
In the 2011 case of Barnett v. State Farm, the courts ruled that State Farm had no obligation to cover plants seized by police for being in excess of the allowable limit in California.
Assuming your bud is on the up and up, your homeowners insurance policy could cover you in one of two ways:
Personal property protection
This kind of coverage will help you replace all kinds of stolen or damaged property, including furniture, electronics, art, jewelry and more.
Your policy will list coverage limits for different types of products. Coverage for trees, plants and shrubs is generally capped at about $500 per item, according to the Insurance Information Institute.
The tricky thing is figuring out how your insurance company would classify your items and how it would decide what they’re worth.
In the 2012 case of Tracy v. USAA, the insurer offered $8,800 to cover the loss of 12 medical marijuana plants — a much lower amount than the $45,600 the owner had requested. The owner sued, but the courts ruled that since cannabis is still prohibited federally, USAA was under no obligation to cover the loss at all.
Liability protection
This kind of coverage helps protect you from lawsuits for injury or property damage you cause to other people.
If your policy includes the right coverage — and cannabis use isn’t excluded — you may be protected from costly bills in the event that someone overindulges during a party at your house.
Liability limits generally start at about $100,000.
Why isn’t legal cannabis always included?
Since the federal government still considers cannabis a Schedule 1 substance — a drug with “no currently accepted medical use and a high potential for abuse,” like LSD or heroin — many insurance companies want nothing to do with it.