Will Marijuana Legalization Affect Home Insurers’ Rates?

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  • In recent years, more states have begun moving toward legalizing marijuana, which has been a controversial topic for some time now. However, the broadening acceptance of these laws – whether it’s for medical or general purposes – raises some serious questions for consumers and experts alike about whether this will end up affecting home insurance rates. For these reasons, it might be wise for insurance agents to learn about the issue and explain what actions, if any, can arise as a result of legalization in a given state.

    Today, 23 states have some form of marijuana legalization written into law, and the individual rules they have will likely have a major bearing on their insurance policies, according to a report from financial news site The Street. For instance, in states where marijuana is legal for medical purposes only, those who have a valid prescription for it will probably be able to claim expenses with their insurers as they would any other medicine. Meanwhile, if it’s legal for owners to grow it in their homes, their policies may have limits on how much is protected by their coverage.

    On the other hand
    But that’s just the broad strokes experts expect will be the case for most homeowners in states where marijuana has been legalized, the report said. In individual cases, the results of a claim involving pot may vary depending upon a number of factors. Currently, experts say that insurers will probably approach such issues with great caution for the time being, because this is still mostly an emerging issue for them to deal with and valuation is likely to remain difficult.

    “It’s a new risk with very little claims experience,” Carole Walker, executive director of the Rocky Mountain Insurance Information Association in the Denver area, told the site.

    Regardless of the issue at hand, insurance agents might want to make sure they’re doing as much as possible to keep their clients informed of the many ways in which their policies might be affected by changing laws in their states. The better they understand these issues, the more likely it becomes that their relationships with their insurers remain strong and positive. This is often true even above and beyond the ability of an agent to occasionally provide clients discounts for their coverage, but striking a good balance between the two might be a very good idea.