{"id":44067,"date":"2026-01-12T16:16:26","date_gmt":"2026-01-12T21:16:26","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=44067"},"modified":"2026-01-12T16:43:52","modified_gmt":"2026-01-12T21:43:52","slug":"up-in-smoke-can-an-undisclosed-grow-op-void-home-insurance","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/insurance\/up-in-smoke-can-an-undisclosed-grow-op-void-home-insurance\/","title":{"rendered":"Up in smoke: Can an undisclosed grow-op void home insurance?"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">When can an insurer void a homeowner\u2019s policy for an undisclosed marijuana grow operation?<\/h2>\n\n\n\n<p>The recent British Columbia Supreme Court (the \u201c<strong>Court<\/strong>\u201d) decision of <a href=\"https:\/\/www.canlii.org\/en\/bc\/bcsc\/doc\/2025\/2025bcsc1724\/2025bcsc1724.html?resultId=579b5cb9eba948768df8031c0a202e02&amp;searchId=2025-12-31T09:56:16:702\/b9eed60252eb44c1af3d9f4bdfa02665&amp;searchUrlHash=AAAAAQA-S2FsbHUgdi4gVGhlIFdhd2FuZXNhIE11dHVhbCBJbnN1cmFuY2UgQ29tcGFueSwgMjAyNSBCQ1NDIDE3MjQAAAAAAQ\"><em>Kallu v. The Wawanesa Mutual Insurance Company, <\/em>2025 BCSC 1724<\/a>, provides clear affirmation of an insurer\u2019s right to void a policy for undisclosed material changes in risk, particularly where the insured fails to disclose the existence of a marijuana grow operation on their property. The case underscores the importance of underwriting vigilance, timely disclosure obligations, and the weight courts place on independent evidence when assessing witness credibility.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What happened in <em>Kallu v. Wawanesa<\/em>?<\/h2>\n\n\n\n<p>The plaintiffs owned a rural Abbotsford property insured under a homeowner\u2019s policy issued by the defendant, Wawanesa Mutual Insurance Company (\u201c<strong>Wawanesa<\/strong>\u201d). In March 2018, a candle in a prayer cabinet in the plaintiffs\u2019 home caught fire. The plaintiffs subsequently made a claim to the defendant insurer.<\/p>\n\n\n\n<p>After investigating the property, Wawanesa denied coverage on the basis that the policy had been voided because the plaintiffs had failed to disclose a material change of risk: the presence of a substantial marijuana grow operation located in an outbuilding a mere 200 feet from the home.<\/p>\n\n\n\n<p>The plaintiffs sued, alleging breach of contract and claiming approximately $300,000 &#8211; $400,000 in damages.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why was the grow-op a \u201cmaterial change of risk\u201d?<\/h2>\n\n\n\n<p>The dispute centred on three core questions:<\/p>\n\n\n\n<ol start=\"1\" class=\"wp-block-list\">\n<li>Was there a material change in risk that required disclosure?<\/li>\n\n\n\n<li>Did the plaintiffs know, or ought they to have known, about the grow operation?<\/li>\n\n\n\n<li>Did the plaintiffs adequately prove their losses and mitigate damages?<\/li>\n<\/ol>\n\n\n\n<p>The Court answered all three questions in Wawanesa\u2019s favour.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Material change of risk: Undisclosed grow operation<\/h3>\n\n\n\n<p>The outbuilding contained evidence of an extensive marijuana grow operation. Photographs taken by the adjuster just days after the fire showed 200 \u201ccarefully arranged\u201d pots and plant remnants. The outbuilding was also equipped with 1000-watt lamps, fans, other cooling components, and plastic lining the walls.<\/p>\n\n\n\n<p>Under the <em>Insurance Act<\/em> and standard policy conditions, an insured must promptly disclose any material change to the risk. The presence of a grow op, even an abandoned one, significantly elevates fire, electrical, and structural risks, and therefore constitutes a material change.<\/p>\n\n\n\n<p>The Court agreed that the grow operation was unquestionably a material change of risk and that the plaintiffs\u2019 failure to disclose it justified voiding the policy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Credibility assessment: Court rejects insured\u2019s evidence<\/h3>\n\n\n\n<p>A major factor in Justice Whateley\u2019s decision was the Court\u2019s adverse assessment of the plaintiffs\u2019 credibility.<\/p>\n\n\n\n<p>The plaintiffs claimed they were entirely unaware of the grow operation and had not entered the outbuilding at any time in the three years before the fire. The Court found this implausible for several reasons. The outbuilding was close to the home, clearly visible, and recently modified. The plaintiffs had invested their life savings into the acreage and had every reason to assess the full property. Independent witness testimony, especially of the realtor who sold the property to the plaintiffs, indicated that the grow operation did not exist at the time of sale. Photographs showed a well-organized, relatively recent grow operation, not a long-abandoned setup that predated the plaintiffs\u2019 occupation of the property.<\/p>\n\n\n\n<p>The Court concluded that the grow op was established after the plaintiffs purchased the property and that their claimed ignorance was not credible.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Claimed damages and failure to mitigate<\/h3>\n\n\n\n<p>Even if coverage were not void, the Court found the plaintiffs failed to prove the quantum of their losses. They did not initiate any cleanup or remediation efforts until approximately 18 months after the fire, allowing water, soot, and smoke damage to sit untouched, leading to extensive mold growth and secondary damage. Evidence, including receipts, in support of the plaintiffs\u2019 claim for damages was \u201csparse, poorly or unhelpfully documented, and exaggerated in certain respects.\u201d<\/p>\n\n\n\n<p>The Court ultimately found that the plaintiffs failed to mitigate their losses and failed to prove their claim for damages.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are the key takeaways for insurers and property owners?<\/h2>\n\n\n\n<p>The Court dismissed the plaintiffs\u2019 claim in its entirety and upheld Wawanesa\u2019s voiding of the policy as valid and justified.<\/p>\n\n\n\n<p>This case raises several important takeaways for insurers and property owners alike:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">A. Grow operations remain high-risk for property insurers<\/h3>\n\n\n\n<p>Courts have no difficulty recognizing a grow operation, either active or abandoned, as a material change requiring immediate disclosure. Wawanesa\u2019s personal lines underwriting manager testified that Wawanesa would not have insured a current grow up even with an added risk assessment. In the words of the court, \u201cinsuring current or active grow ops is possible, but in the substandard market\u201d.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">B. Non-disclosure can justify retroactive voidance<\/h3>\n\n\n\n<p>Wawanesa\u2019s decision to void the policy as of the renewal period when the material change likely arose was upheld. Premiums were refunded from that date onward, reinforcing the availability of this remedy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">C. Credibility matters<\/h3>\n\n\n\n<p>Where photographs, expert observations, and witness testimony objectively contradict an insured\u2019s account of events, courts are willing to draw adverse conclusions regarding nondisclosure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>This decision offers strong support for insurers acting on undisclosed material changes in risk, particularly in the context of grow operations and other high-hazard uses of insured property. For insurers and underwriters, the case provides a clear illustration of how courts apply disclosure obligations and assess credibility when evaluating alleged non-disclosure.<\/p>\n\n\n\n<p>To discuss how&nbsp;<em>Kallu v. Wawanesa<\/em>&nbsp;may affect your underwriting, policy wording, or claims strategy, or to review your approach to material change and non\u2011disclosure, please contact a member of our <a href=\"https:\/\/www.millerthomson.com\/en\/expertise\/insurance-defence\/\">Insurance Defence<\/a> team.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When can an insurer void a homeowner\u2019s policy for an undisclosed marijuana grow operation? The recent British Columbia Supreme Court (the \u201cCourt\u201d) decision of Kallu v. The Wawanesa Mutual Insurance Company, 2025 BCSC 1724, provides clear affirmation of an insurer\u2019s right to void a policy for undisclosed material changes in risk, particularly where the insured [&hellip;]<\/p>\n","protected":false},"author":122,"featured_media":14367,"parent":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[525],"insight-format":[416],"class_list":["post-44067","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insurance"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Up in smoke: Can an undisclosed grow-op void home insurance? | Miller Thomson<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.millerthomson.com\/en\/insights\/insurance\/up-in-smoke-can-an-undisclosed-grow-op-void-home-insurance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Up in smoke: Can an undisclosed grow-op void home insurance? | Miller Thomson\" \/>\n<meta property=\"og:description\" content=\"When can an insurer void a homeowner\u2019s policy for an undisclosed marijuana grow operation? The recent British Columbia Supreme Court (the \u201cCourt\u201d) decision of Kallu v. 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The recent British Columbia Supreme Court (the \u201cCourt\u201d) decision of Kallu v. 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