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Parents Should Consider the Status of Student Liability Insurance

For many parents, sending their children off to University or College is a busy time. They have a lot on their mind as they check and double check to make sure their children have everything they need to venture away from the nest. Often overlooked, however, is whether or not their child is covered under any liability insurance policy in their new home.

 

Residential Liability Insurance is a method of protecting not only the personal belongings of the insured, but also any accidents in which the insured has responsibility. For example, if a student were to cause a fire in their apartment and someone were to be hurt, this liability insurance would protect them in a negligence action against them.

 

In many cases, a parent's Residential Insurance policy will cover students who are living away from their parent's homes while away for studies at a college or university. There will, however, be circumstances where students living away from home will not be covered.

 

Residential Insurance Policies generally contain a definition of the term "insured" which includes not only the named insured, but also individuals living in their "household". On a plain reading of the word, it is not clear whether students living away from home for school are members of the insured's household, or not. For this reason, the courts have adopted a contextual approach in determining whether or not a student is considered to be a part of the parents' household after they have left for school. Some of the common factors considered in determining whether or not students are covered under their parents' insurance policy include:

 

  • whether or not student returns home for summers and holidays,
  • whether the student intends to return home after their studies,
  • the level of communication between the student and parent(s),
  • the self-sufficiency of the student,
  • whether or not the student still has possessions at their parents' home,
  • whether or not the parents maintain a room for the student at their home,
  • whether the student is covered under any other insurance policy,
  • the level of control exercised by the insured over the student.

Many insurance providers offer policies for tenants to cover their activities and belongings in a rental unit. Parents who are unsure about whether or not their children are covered under their Residential Insurance Policy may consider contacting their insurance agent or broker for advice.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Is My Ganja Insured?

The Liberal government is poised to introduce legislation that will legalize marijuana for recreational use in Canada.  One hopes that the Liberals will have the good sense to regulate the cultivation of marijuana, but it is within the realm of possibilities that legal home grow operations proliferate under the new law.  If the black market prices for marijuana are sustained in the open market, then home grow crops could be among the most valuable assets in some households.  That begs the question of whether home growers will be compensated by their home insurers if their crops are stolen or damaged in a fire.

 

Maybe not.  The cultivation of marijuana for medical use is already legal in Canada, and at least one insurance claim arising from the loss of a marijuana crop has come before the Court.

 

Stewart v. TD General Insurance Company is a 2014 decision of the Ontario Divisional Court that involved a claim for compensation for the loss of a marijuana crop.  Mr. Stewart was licensed to possess and cultivate medical marijuana for his own consumption.  He had an outdoor grow operation at his home.  Just when his crop was ready to be harvested, thieves ripped the plants out of the ground and made off with them.  Mr. Stewart estimated the cost of replacing the plants and the crop was just under $50,000.  He asked his home insurer to compensate him for the cost of replacing the plants and the value of the lost crop.  However, the Insurer only approved the claim pursuant to a limited extension of coverage that applied to trees, shrubs and plants.   The wording of the extension provided as follows: 

 

"15. Trees, shrubs and plants

Trees, shrubs and plants being part of your landscaping on your premises. We will pay up to 5% of the limit of insurance applicable to your dwelling, subject to a maximum of $1,000 for any one tree, shrub or plant including debris removal. You are insured against loss cause (sic) by fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism or malicious acts, theft or attempted theft."

                                                      

As set out in the extension, the policy limit for coverage for trees, shrubs, and plants was $1,000 per plant.  The Insurer paid Mr. Stewart a total of $11,000.  Mr. Stewart sued his Insurer to recover the balance of his loss.  He alleged that the loss of the marijuana fell within the coverage for ‘personal property’ to which much higher policy limits applied.  The policy wording for ‘personal property’ coverage is set out below:    

 

"COVERAGE

Coverage B – Personal Property (contents)

1. We insure the contents of your dwelling and other personal property you own, wear or use while on your premises which is usual to the ownership or maintenance of a dwelling." 

                                                            

The Divisional Court dismissed Mr. Stewart’s claim.  While all personal property inside Mr. Stewart’s home was covered, personal property outside of his home was only covered if it was “usual to the ownership or maintenance of a dwelling.”   The Court heard evidence that only one third of one per cent of Canadians cultivated marijuana in their homes.  The Court found that the plants were not “usual to the ownership or maintenance” of a dwelling and ruled that the loss of the plants did not fall within the personal property coverage in the policy.  The Court agreed with the Insurer that the only coverage for the marijuana in the policy was the extension pertaining to trees, shrubs and plants.  Therefore, Mr. Stewart had already been paid everything he was entitled to.  

 

The lesson to be drawn from the Stewart case is not that loss or damage to a marijuana crop will never be fully covered by a home insurer.  The outcome in the Stewart case might have been different if Mr. Stewart’s crop had been grown indoors or if the loss had occurred in the future when home grow operations are more widespread.   Furthermore, policy wording does vary from insurer to insurer, and Mr. Stewart may have had a different outcome if he had been insured by another insurer.  

 

The moral of the Stewart case is simply that home growers cannot take it for granted that their ganja is insured, and they should talk to their agent or broker to ensure that they have coverage for their crops.

 

Ted Dreyer is a construction and insurance lawyer at Madorin, Snyder LLP. Madorin, Snyder LLP is a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  Please visit our construction law page.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

 

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