Could Growing (Legal) Marijuana Void Your Homeowners' Insurance Policy?

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If you live in one of the twenty-six states (or the District of Columbia) with legalized medical or recreational marijuana, you may have considered obtaining your own growing license so that you'll be able to inexpensively create and consume marijuana without paying dispensary prices. However, doing so could run you afoul of your homeowners' insurance guidelines and could even result in revocation of coverage if you're determined to be in violation of your policy agreements. Can you obtain insurance for a home used to grow marijuana? Read on to learn more about how insurance companies are dealing with these changing laws and what you can do to maintain coverage even if dropped by your current insurer.

Why are insurance companies reluctant to cover homes where marijuana is grown?

Because marijuana is still classified as a dangerous (and illegal) drug by the federal government, private companies like insurers are often at a loss as to how to bridge the gap between state legalization and federal restriction. Paying out for a claim caused (even indirectly) by the homeowner's marijuana growing or usage when this is still illegal at the federal level can put some insurers in violation of their underwriting rules, particularly if these insurers do business in states where marijuana is legal and in states where it's not.

In addition to the sticky legal issues, indoor marijuana growth can often be a fire hazard. The lights needed to encourage blooming can become quite hot, and those who are growing in an enclosed space (like a closet) may not have added adequate ventilation to reduce the risk of fire. Many insurers may choose to make an across-the-board policy applying to any indoor growing operations.

What can you do to maintain insurance coverage if you're planning to grow marijuana in your home? 

Although some interstate insurance companies may bar you from coverage, you could have more luck by investigating insurance companies that only extend policies within your state (or in other states where marijuana is legal). These companies are less likely to be restricted by the federal laws and regulations impacting marijuana enforcement.

Even if your current insurance company doesn't seem to have a problem with your marijuana farming, it may be worthwhile to invest in a greenhouse or other secured outbuilding rather than pioneering a grow within your home. Not only can this be a more efficient use of space and energy, it will reduce the risk of fire damage to your home or your crop.