A landlord who encourages, but does not require, all his residents to carry Colorado Springs renters insurance wanted to know,
I own apartments in Denver, Colorado Springs, and Arvada. I encourage tenants to be covered, but now I’m faced with a unique situation. If a tenant wants to grow medical marijuana renters insurance should be mandatory, right?
Great question, and one that requires some analysis. Tenants with medical marijuana renters insurance open some interesting questions that are far from settled.
Medical marijuana renters insurance requirements are new, and those lease provisions haven’t yet really been tested in any courtroom. However, there are several reasons it’s a good idea to have renters insurance coverage for medical marijuana.
First, of course, it’s always a good idea to require tenants to carry renters insurance. You don’t want to absorb your deductible for a fire a tenant caused, and you want your insurance company to have a way to collect from the tenant – that benefits your rates in the long term. Renters insurance subrogation is common and mostly hands-off for you. Your insurance company takes care of that, allowing you to recover deductibles in a best-case scenario.
What risks make medical marijuana renters insurance a good idea?
Fire is an ever-present risk, whether the tenant is simply smoking it, or growing it. Generally speaking, a tenant who smokes marijuana has the same risk of fire as a tenant who smokes cigarettes, but that risk is definitely non-zero. You’re likely to find that most tenants who use medical marijuana don’t grow it, they purchase it in forms that are easier to ingest. That rather lessens the fire danger, but those who do grow (as they are entitled to do in some states) have an increased fire risk based on the electricity draw required for lights, the flammability of certain fertilizers, and other factors. As a broad generalization, we suggest that even if landlords require medical marijuana renters insurance, then the lease should spell out the growing of marijuana – medical or otherwise – as a prohibited activity to reduce the fire risk.
Another serious risk to consider is theft and break-ins. Most medical marijuana tenants are prudent about whom they discuss their medication and supplies of medication with, but the presence of medical marijuana on the premises can be attractive to would-be thieves. To reduce those risks, there are some inexpensive actions that landlords can take which will make your property safer as well as more attractive to the responsible sort of medical marijuana tenant.
- Upgraded window locks with quick releases inside for fire safety
- Provision of wooden dowels or metal rods to prevent windows and sliding glass doors from opening
- Deadbolt locks on all exterior doors – this is an inexpensive upgrade that you really should be doing anyway.
- Solid window treatments, tinting, or blinds if requested by the tenant to avoid casual passers-by noting the presence of medical marijuana in the unit
- Filtered HVAC exhaust/air exchange to reduce the risk of casual passers-by noting the smell
The last two are more related to passive security. You don’t want anyone to be aware that there is something to steal, and those are inexpensive methods of ensuring that.
Medical marijuana renters insurance coverage
Your medical marijuana tenant should secure coverage from a large, reputable writing company, such as those offered by Effective Coverage. It’s important to be aware of the policy language in very specific terms. Many Colorado renters insurance policies contain exclusions for losses arising from the commission of a crime, on personal property, liability, or both.
On such a policy, coverage would hinge on understanding that clause. Some policies specify “felony” rather than “criminal act”, which is a significant difference. If your Colorado tenant has personal quantities and meets the criteria for legally possessing the same, the only concern would be Federal law. Generally Federal law would not classify an eighth of an ounce for personal use as a felony, for example, and policy language may require charges to be brought for the exclusion to apply, in which case the entire concern may be a moot point.
Medical marijuana renters insurance coverage is a new and developing area, and many carriers are still determining how to handle related claims. That’s why it’s important to have your tenant work with large, reputable writing companies and to understand their policy in great detail.
You are, in most locales, not obligated to allow tenants to smoke anything in a building. Ingestion is another matter, especially in states where they are clearly legal. If you do allow smoking, or knowingly rent to someone using oils or edibles, you need to make sure that everyone involved is protected. Prohibiting growing is well advised for the benefit of you and your property, as well as your other tenants. According to Zillow, there is “growing evidence of the marketability of openly allowing marijuana use [by tenants, where legal per state law].” There are certainly opportunities to rent to good, responsible tenants who use medical marijuana, but that’s a choice you have to make. Whatever your choice in that matter may be, make sure that the lease clearly spells out the policy and any restrictions to avoid confusion down the road.
In a nutshell, medical marijuana renters insurance can provide protection for you and your tenant, though it’s crucial to understand the policy language. You can call (800)892-4308 to speak with a Colorado renters insurance expert, or click above for instant online quotes.