What would legal pot mean for your insurance policy?

Marijuana’s legalisation has created waves across the US, with the substance now legal in 20 states.

A recent Yahoo! article investigated the impact of legal marijuana on American home and contents insurance policies, finding that there were no exclusions preventing pot possessors from claiming their very expensive plants.

But, what would happen if the drug was legalised in Australia?

With the announcement of a national clinical trial of medical marijuana last month, a time when marijuana can legally be possessed and consumed might not be far away, and the implications for insurance policies could be huge.

Currently marijuana is an illegal substance in Australia and, as a result, cannot be covered under any home and contents policy.

However, we examined the policy statements of some Australian home and contents insurance standard policies to see how their coverage would stack up if marijuana was legalised.

Allianz’s SureCover Home Insurance policy only excludes coverage for “trees, shrubs and plants growing outdoors in the ground” [emphasis added] which seems to suggest that you would be covered if your hydro house burnt down.

The same phrase is used to exclude liability in GIO’s PDS.

AAMI also will not cover for plants “in the ground”, but specifies that its customers are able to recover for “plants in pots”.

So, if marijuana is ever legalised in Australia we may see a flurry of updated PDS' just before legislation kicks in.