Only in cool and wacky California would I be in a property insurance claims seminar titled, Dealing With Marijuana Insurance Claims. The presentation was by Robb Greenspan at the First Party Claims Conference West in sunny Marina del Rey last Thursday.
Craig Kubiak, David Pettinato, and Kenneth Kan successfully won a jury trial last December in California which involved marijuana. The case confidentially resolved a little more than a week ago while on appeal so I cannot comment much about it. However, the number of marijuana insurance claims is growing. (pun intended)
An article in Claims Journal, "Insurers Still Grapple With Marijuana Coverage Questions," posed the following hypotheticals:
- Will homeowners insurance cover medical marijuana under contents coverage if the marijuana is lost in a peril?
- Will insurance cover recreational (non-medical approved) marijuana under contents coverage if it is lost in a peril?
- Will insurance cover a claim if an accidental fire in the home is caused from using marijuana (medically or recreationally)?
The claims scenarios involving marijuana are novel. For example, Robb Greenspan reported on a case where police mistakenly took marijuana for evidence and a theft claim was made.
Many coverage denials are made for losses arising out of "illegal" activity. The issue is whether a now legal activity in most states is trumped by illegality under federal law. If you want an expert analysis of that issue, I suggest you contact David Pettinato or Ken Kan.
I have been reluctant to publicly mention that Merlin Law Group has several marijuana coverage cases. My concern has been the perception I somehow would be condoning the use of marijuana, which is still controversial. David Pettinato has properly criticized me for not being more "courageous" about helping those that are wrongly denied coverage for loss. Insurance companies take premiums from sinners and saints as well as houses of ill repute or churches. The morality only seems to arise when the insurance company has a chance to avoid payment.
This blog has four prior posts directly dealing with marijuana:
Policy Language Excluding Vandalism for "Illegal Growing Operations" Leaving Landlords Without Proper Insurance Coverage
Medical Marijuana Grow House Goes "Up In Smoke"
Up in Smoke – The Medical Marijuana Controversy Reaches Insurance Policy Disputes
Marijuana in the Mainstream: How courts are dealing with insurance claims of loss for marijuana plants and marijuana plant clean-up
I am certain there will be more. If you want more straight dope on marijuana coverage issues, call David Pettinato.