Neighborhood Watch: Mercury Insurance Alerts Homeowners to Illegal Marijuana Grow House Trend

LOS ANGELES, Calif. (March 31, 2020) – A home with the curtains drawn, an unmaintained lawn and landscaping, and rare sightings of people entering or leaving could signal suspicious activity might be going on inside. Josh Leininger, Mercury Insurance Special Investigations Unit supervisor, says these are signs he’s seen in instances when a home was being used as an illegal marijuana grow house.

Leininger has investigated nearly 20 homeowners insurance claims over a three-year period involving suspected marijuana grow houses in California’s Riverside and San Bernardino Counties. The homes were purchased in suburban neighborhoods, where they would blend in with others on the street.

“Grow houses are not only illegal, but they cost honest homeowners hard earned cash,” said Leininger. “Criminals are always looking for ways to cheat others out of money and earn a quick buck, especially when it comes to endeavors like insurance fraud. This is not victimless – it costs consumers billions of dollars annually in higher premiums, and Mercury Insurance is doing its part to ensure homeowners insurance policyholders don’t feel it in their wallets.”

Most often, grow houses are part of organized crime rings, where individuals purchase homes and take out falsified insurance policies listing the home as the owner’s primary residence. These homes are frequently altered in ways that makes them uninhabitable by removing walls and framing that support the house and installing makeshift electricity and ventilation systems. Additionally, the owners may tap into neighboring water and electrical supplies to save on costs.

“Mercury has checks and balances in place to verify the validity of insurance claims to protect our policyholders – to protect against unforeseen disasters and covered losses, and provide financial security,” said Leininger. “There are red flags that signal something may not be right with a claim. For example, if the homeowners insurance policyholder’s mailing address differs from the address for the insured property on a claim, or if a landlord insurance policy is taken out on the property shortly before a claim is filed, that could be a signal the claim is fraudulent. 

“When criminals falsify information on their insurance applications and submit fraudulent claims, it can drive up insurance rates for honest, hardworking people. Copies of cell phone records, credit card statements and lease agreements are some of the supporting documentation that help us successfully deny fake claims and prevent phony payouts.”

The cost per claim for the grow houses averaged approximately $150,000.

Insurance fraud, the second most costly white-collar crime in America behind tax evasion, accounts for at least 10 percent of property and casualty claims, and costs hard working Americans billions of dollars each year. Consumers who suspect they’re the victim of insurance fraud or see someone else committing it should report it to the National Crime Insurance Bureau. Suspected illegal activity being conducted in a neighborhood should be reported to local law enforcement.

About Mercury Insurance

Mercury Insurance (MCY) is a multiple-line insurance organization predominantly offering personal automobile, homeowners and commercial insurance through a network of independent agents in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia. Since 1962, Mercury has specialized in offering quality insurance at affordable prices. For more information visit or and follow the company on .

About the Mercury Special Investigations Unit

Whether it's a staged car crash, home arson or exaggerated injuries and suspect medical billing, criminals are constantly looking to invent new ways to cheat insurance companies and American consumers. Mercury’s SIU team is the company’s front-line defense, working with law enforcement around the country to bring these criminals to justice.

Mercury's SIU was founded in 1978, becoming one of the first companies to create an investigative department to combat insurance fraud. Since its inception, the SIU, which employs more than 40 seasoned investigators nationwide, has exposed thousands of fraudulent auto, home and medical claims, saving policyholders hundreds of millions of dollars. The SIU mission: prevent phony payouts, which helps maintain low premiums for Mercury customers.

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