Homeowners renting out their properties in Australia are prime targets for those seeking to setup a cannabis farm whilst hiding in plain sight. Unfortunately for this homeowner, her cannabis farmer was inexperienced, resulting in a fire that damaged her property.
On top of her unfortunate choice in tenant, her insurance company, Commonwealth Insurance, has denied coverage of the incident, which was recently upheld by the Australian Financial Complaints Authority (AFCA).
Despite claiming that “she advised the insurer she was going to rent the property and she was advised the policy covered everything“, the insurer is denying coverage as the “policy option providing cover for malicious damage by tenants was not selected“. As English isn’t her first language, she relied on the advice of the insurer, rather than reading the fine print in the policy itself.
Growing cannabis anywhere in Australia is currently illegal without a medical license, except in the ACT (for personal use only). That means the policy she chose which excludes malicious damage would “not cover for damage caused in this manner”.
This determination is in favour of the insurer. Should the complainant accept this determination then within seven days of notification of acceptance, the insurer is to pay to the complainant $2,883.47 (the premiums paid). Otherwise, the insurer is not required to take any further action in relation to the claim or the complaint.
It’s a very unfortunate situation for the homeowner to be in, and can happen to almost anyone, anywhere.
While cannabis remains illegal across the majority of Australian states, criminals will continue to rent out houses to set up their grow operations, as it’s still vastly profitable for them.
Legalising cannabis may not put an end to the black market in an instant, but it will surely reduce the harm on innocent people like this homeowner.
You can read the full determination by the AFCA here.