Insurance VS Dagga

Since the Constitutional Court decriminalised personal use and private cultivation of the magical green in September 2018, we have seen much discussion around the home use of weed and how it could affect any future or current insurance claims.

cannabis insurance

When it comes to cannabis insurance long-term insurers, Liberty & Outsurance, encourage advisers and clients to inform their insurer of any medical or lifestyle events that would impact their policy applications. Especially so if it’s substance-based, like weed. As it may result in your claim being denied if you did not disclose this information.

It will also ensure that clients receive their pay-outs when they need it most. Not telling the truth about their health on an application form, places the payment of a claim in jeopardy.

Things to tell your insurance company when it comes to cannabis and insurance:

  • Frequency
  • Amount consumed
  • The purpose

According to Liberty, the benefits of full disclosure when it comes to consumption include:

  • reassuring clients that their claims will be paid in accordance with the terms and conditions of the policy;
  • ensuring a fair and more affordable premium is charged;
  • leading to faster underwriting and fewer medical requirements to speed up the application process;
  • resulting in fewer requirements needed at the claims stage;
  • and leading to fewer legal and client disputes, especially if you are a consumer of cannabis.

3 important questions to clarify in cannabis and insurance cover:

  • Will you repudiate a claim if I use cannabis but don’t declare it on my application form?
    – Insurers have a responsibility to ensure that all valid claims are paid, but applicants have an equal responsibility to answer all questions truthfully.
  • If I don’t smoke cannabis but I drink and eat it, will I pay smoker rates?
    – The short answer is yes, the policyholder will pay general smoker rates as well as rates linked to the risk of the hallucinogenic properties of the substance.
  • If a claim is as a result of being “stoned”, will it be illegal, and the claim declined?
    – If an illegal act is committed, Liberty reserves its rights to decline the claim.

At the end of the day, honesty is the best policy. Cannabis still lives with a stigma, and it will take time for this to fade. Rather be open and honest about your consumption. Covering it up has the potential to cause problems with your insurers.

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