LOST YOUR STASH? YOU'RE IN GOOD HANDS

Usually when police arrest a pot smoker and confiscate his stash, he calls
a lawyer. In California, he calls his insurance agent and files a claim for
lost property. If he can prove he uses marijuana for medicinal purposes,
chances are his claim will get paid.

Until now, that is. A U.S. Supreme Court ruling has emboldened some
insurance companies to change their stance on this controversial issue. "We
will not pay any future claims," says Elenore Williams, a spokeswoman for
State Farm Insurance in California. "Our policies are such that we don't
pay claims on illegal contraband."

This was a non-issue until 1996, when California voters legalized marijuana
for medical purposes, such as when cancer patients use it to ease chronic
pain. Since then, a small number of patients whose pot was lost or stolen
have successfully filed claims for reimbursement based on their
property-protection insurance policies. Insurers also have paid a handful
of patients for marijuana plants confiscated by police, in cases where the
charges later were dropped.

These payments have not exactly been a major drain on the insurers'
finances. "We've seen fewer than 10 of these claims," State Farm's Williams
says. "Maybe three or four have been paid." Allstate spokesman Bob Daniels
says his firm has paid out only four marijuana claims in California--and
none since the Supreme Court issued its ruling in May. Allstate is trying
to determine how the ruling applies to its business and has not yet come to
a conclusion. "It's a complex legal issue," Daniels says.

Although a number of states have now legalized marijuana for medical use,
Congress has not followed suit, so federal law recognizes no such
exception. In practice, federal prosecutors rarely go after small-time
marijuana users, so it didn't matter. But the "buyers' cooperatives"
established in California have attracted more attention, and the high court
ruled in May that these cooperatives cannot claim medical necessity as a
defense if they are busted for distributing marijuana.

The idea behind the cooperatives is to give patients easy access to the
drug, rather than have them skulking in alleys to buy it from street
dealers. Keith Stroup, executive director of the National Organization for
the Reform of Marijuana Laws (NORML), says the court's ruling was
regrettable, but he adds that it was narrowly drawn and does not invalidate
the state laws allowing medical use of marijuana. Stroup says insurance
firms that have changed their policy either have misunderstood the court's
ruling or are using it as an excuse to stop paying these claims.
Corporations tend to be conservative, he says, and paying for somebody's
marijuana "makes them nervous."

Here's something else to make the insurers nervous: Stroup says that firms
that stop paying marijuana claims may find themselves hauled into court.
"If in fact a legitimate patient contacts us, we will offer them free legal
assistance," he says. "We are not going to stand by and watch an insurance
company gouge a sick and dying patient."

That is just the sort of line a plaintiff's attorney could use to win a big
award from a sympathetic jury. The insurance firms may find it far cheaper
to pay these penny-ante property claims than to reject them and get sued as
a result.