To date, 19 states and Washington, D.C. have legalized marijuana for recreational use and 37 states have approved it for medicinal purposes. [1] Despite this, cannabis is still classified as an illegal drug on the federal level, and insurance companies have sometimes treated it as such when it comes to your homeowners insurance coverage — even in states where marijuana is legal. [2] But there is no denying the importance of homeowners insurance when it comes to the future of home cannabis use and cultivation.
In this guide, we’ll discuss how cannabis is generally covered in states where it’s legal, and what to do if you’re not sure if cannabis is covered under your policy.
First, is marijuana legal in your state?
Recreational marijuana is currently legal in 19 states, Washington D.C., and Guam, and several others — including Minnesota, Pennsylvania, and Hawaii — appear primed to legalize it in the near future. Check your state’s up-to-date cannabis laws below.
State | Fully legalized | Legal for medicinal use | Legal to grow at home |
|---|---|---|---|
Alabama | ✔️ | ||
Alaska | ✔️ | ✔️ | ✔️ |
Arizona | ✔️ | ✔️ | ✔️ |
Arkansas | ✔️ | ||
California | ✔️ | ✔️ | ✔️ |
Colorado | ✔️ | ✔️ | ✔️ |
Connecticut | ✔️ | ✔️ | ✔️ |
Delaware | ✔️ | ||
District of Columbia | ✔️ | ✔️ | ✔️ |
Florida | ✔️ | ||
Georgia | |||
Hawaii | ✔️ | ✔️ | |
Idaho | |||
Illinois | ✔️ | ✔️ | ✔️ |
Indiana | |||
Iowa | |||
Kansas | |||
Kentucky | |||
Louisiana | ✔️ | ||
Maine | ✔️ | ✔️ | ✔️ |
Maryland | ✔️ | ||
Massachusetts | ✔️ | ✔️ | ✔️ |
Michigan | ✔️ | ✔️ | ✔️ |
Minnesota | ✔️ | ||
Mississippi | ✔️ | ||
Missouri | ✔️ | ✔️ | |
Montana | ✔️ | ✔️ | ✔️ |
Nebraska | |||
Nevada | ✔️ | ✔️ | ✔️ |
New Hampshire | ✔️ | ||
New Jersey | ✔️ | ✔️ | |
New Mexico | ✔️ | ✔️ | ✔️ |
New York | ✔️ | ✔️ | ✔️ |
North Carolina | |||
North Dakota | ✔️ | ||
Ohio | ✔️ | ||
Oklahoma | ✔️ | ✔️ | |
Oregon | ✔️ | ✔️ | ✔️ |
Pennsylvania | ✔️ | ||
Rhode Island | ✔️ | ✔️ | |
South Carolina | |||
South Dakota | ✔️ | ✔️ | ✔️ |
Tennessee | |||
Texas | |||
Utah | ✔️ | ||
Vermont | ✔️ | ✔️ | ✔️ |
Virginia | ✔️ | ✔️ | ✔️ |
Washington | ✔️ | ✔️ | ✔️ |
West Virgina | ✔️ | ||
Wisconsin | |||
Wyoming |
How cannabis laws impact homeowners insurance
While it’s legal to own and grow marijuana in several states, insurance companies have long been apprehensive about insuring it due to its status as a Schedule 1 controlled substance, according to attorney Richard Blau, a shareholder at GrayRobinson, a Tampa-based law firm.
“Some insurers will not venture into the area (of covering marijuana) out of fear of jeopardizing their good standing with federal regulators,” Blau says. “Others question whether marijuana-related policies are even enforceable; several courts across America have rendered conflicting decisions on this subject.”
Cannabis laws on the state level
Laws and regulations on the state level could also impact whether or not you’re covered. For example, of the 24 states and jurisdictions where it's legal to grow marijuana at home, eight of them only allow you to do so if you’re a certified medical marijuana patient.
Some states also restrict the number of plants you’re allowed to grow for personal use. That means if you claim a loss on marijuana plants you weren’t authorized to grow — or on an amount in excess of the state’s allowable limit — your claim may be denied.
Cannabis laws on the local level
To complicate things further, some municipalities have their own laws restricting marijuana use and cultivation in states where cannabis is otherwise legal. If you live in a town where recreational or medical marijuana use is banned, this could also impact whether or not cannabis-related losses are covered.
Does homeowners insurance cover cannabis?
Most homeowners insurance policies cover trees and indoor or outdoor plants if they’re stolen or damaged by a covered peril. But what about cannabis plants — are those covered, too? The answer is: It depends.
The way cannabis is covered by homeowners insurance policies will likely vary by policy and insurance company, says Meghana Shah, partner and co-lead of the cannabis industry team at Eversheds Sutherland, a New York City-based law firm.
Some policies may exclude cannabis or controlled substances more broadly, while others may provide coverage if the policyholder lives in a state where cannabis is legal.
“Such coverage would be available only if the policyholder is legally in possession of the cannabis plant or product,” Shah says.
While questions remain surrounding the legality of marijuana-friendly home insurance, here is how you’re likely covered under each applicable section of your policy:
Trees, shrubs, and plants coverage
Homeowners insurance comes with additional coverage for plants against certain perils, including fire, lightning, vandalism, and theft.
Plants are generally covered for up to 5% of your policy’s dwelling coverage limit. That means if your home is insured for $300,000, you may have up to $15,000 in coverage for your legally grown marijuana plants.
But there’s a caveat: No more than $500 can be paid for any one plant, according to Brenda Wells, PhD., CPCU, AAI, CRIS, and professor at East Carolina University’s Risk Management and Insurance program.
Given the fact that mature plants can often be worth several thousands, this per-plant limit will likely leave you underinsured in the event of a loss.
“Most homeowners insurance policies have a $500 limit on trees, shrubs, and plants, and that limit usually applies for live cannabis plants,” Wells says. “There is otherwise no specific limit — other than the personal property coverage limit — on covering cannabis that has been harvested.”
Personal property coverage
Certain marijuana products — including the harvested buds, extracts, edibles, and paraphernalia — may be covered under the personal property coverage section of your policy. This is the section of homeowners insurance that covers damage or loss to your belongings, like furniture, clothes, and other items in your home.
Unlike your policy’s trees, shrubs, and plants coverage, your cannabis products would likely be covered up to your policy’s personal property coverage limit rather than a per-item limit.
Though limits of $1,500 and $2,500 do apply to expensive valuables and business property, it’s unclear if those limits would apply to legal cannabis products.
Personal liability coverage
Personal liability coverage pays for your legal and medical expenses in the event you’re legally responsible for injuring someone or damaging their property.
But most policies won’t cover bodily injury or property damage caused by the use, sale, manufacture, delivery, transfer, or possession of a controlled substance, including marijuana.
Similar to how cannabis losses are sometimes covered in states where marijuana is legalized, it's possible the same could apply to cannabis-related liability.
“Since cannabis is legal in many states, but is still illegal at the federal level, it really depends on the carrier’s position,” says Wells.
How to get covered against cannabis loss
As long as marijuana remains illegal on the federal level, it will likely be difficult for insurance companies to develop any uniform coverage standards around legal cannabis. But if you’re growing marijuana legally and you’re curious about how it's covered, the best thing you can do is call your insurance company and ask about how you’re covered.
“It’s important for homeowners to be transparent with their insurance agents about the nature of the coverage they are seeking with respect to cannabis,” says Shah. “This ensures that they receive the coverage they expect in this nuanced and evolving area.”
If your current insurance policy doesn’t meet your coverage needs, our Policygenius agents can help you find one that does.
