INSURERS SICK OF MARIJUANA LOSSES CLAIMS

LOS ANGELES (Reuters) - A Supreme court ruling that federal drug laws
prohibit distribution of marijuana may be just what the doctor ordered for
California insurance companies sick of paying claims on lost, stolen or
confiscated pot.

People legally using marijuana for medicinal purposes in California have
been able to file claims with their insurance companies for payments when
the drug was lost, stolen or confiscated by police.

However while medicinal use of marijuana is legal in California under a
1996 voter initiative, a U.S. Supreme Court decision last May barring
distribution of the drug has thrown into question the validity of such
insurance claims in California.

Insurers said on Tuesday they are rethinking their policies regarding
claims and marijuana advocates are crying foul.

"In the last two years there have been four losses (of marijuana) in
California where we actually made a payment. We are in the process of
trying to figure out exactly what our position is going to be in the
future. We aren't sure," said Bob Daniels, a spokesman for Allstate
Insurance, a unit of The Allstate Corporation (ALL.N).

Elenore Williams, a spokeswoman for State Farm Insurance in Los Angeles
said that the company has seen "four or five" claims for lost marijuana in
the past few years, but she could not specify which of the claims had been
paid. She said that in light of the federal ruling, State Farm "is not
going to pay any future claims with regard to medical marijuana."

Marijuana advocates, meanwhile, warned that insurers should be cautious
when investigating medicinal pot claims because refusing to pay could open
them up to litigation because it is still legal for a patient to grow and
use his own marijuana for medicinal purposes in California.

The U.S. Supreme Court ruling does not invalidate medical marijuana use in
California, said Eric Shevin, an attorney and spokesman for the Los Angeles
chapter of the National Organization for the Reform of Marijuana Laws. "The
federal court was clear that it wasn't ruling on individual patients who
had a necessity" to grow their own, Shevin said.