MARIJUANA INSURANCE CONSIDERED

UKIAH -- A growing number of medical marijuana users whose backyard
marijuana plants were stolen by thieves or commandeered by police have
succeeded in getting insurance companies to reimburse them for the loss.

But just as medical marijuana was beginning to gain acceptance as an
insurable belonging, the Supreme Court's recent ruling in an Oakland case
has cast doubt on the future of such payments.

The dollar amounts aren't huge -- after all, the missing marijuana is
supposed to keep one person healthy, rather than be sold on the street,
where high-grade marijuana is more expensive than gold. But it's real money
to a sickly policyholder. One insurer paid $12,375 to a man who lost 3
pounds of marijuana to an armed intruder.

It's not like anyone with a stash can file a claim. Insurers, which are
state-regulated, don't cover illegal property.

But they generally agree that marijuana becomes a homeowner's bona fide
personal property under some state laws when the policyholder has
permission to grow or possess it for medical reasons.

That's possible in the eight states where medical marijuana laws are in
conflict with federal drug laws -- California, Alaska, Arizona, Colorado,
Hawaii, Maine, Oregon and Washington.

Even though these laws conflict with federal law barring use or possession
of marijuana, major insurance companies have made at least a dozen such
reimbursements, according to a series of interviews by the Associated
Press. Most of the claims for stolen plants or harvested marijuana have
been filed in California.

The claims have forced insurers to enter a legal gray area.

"How do you determine its value? Who is going to be your expert?" asks Lisa
Wannamaker, a spokeswoman for Allstate, which has paid four such claims in
California. "There's no set process in place on how to deal with it."

Any developing clarity disappeared in May, when the Supreme Court ruled
that clubs dispensing medical marijuana according to state laws could not
use a "medical necessity" defense against federal anti-drug laws. The court
noted that Congress declared that marijuana has no medicinal value.

However, the justices said they specifically did not resolve such
constitutional questions as whether states can experiment with their own
laws, or whether individual Americans have a right to marijuana as a pain
remedy.

Medical marijuana advocates say insurers are treating the ruling as
political cover despite these unresolved legal questions.

"If an insurance company is looking for an excuse to save a few dollars and
deny a claim, I suppose they can use the Supreme Court case as an excuse,"
says Keith Stroup, executive director of the National Organization for the
Reform of Marijuana Laws.

None of the major insurance companies questioned said they received new
marijuana claims since the ruling. State Farm, citing federal law, will
deny future claims, and the other insurers will give them renewed scrutiny,
spokesmen said.

"It's clearly stated in the homeowners' policy that we will not pay for
illegal activities," said Lonny Haskins, the State Farm spokesman.

At least three other companies besides Allstate have paid claims on stolen
medical marijuana in California. They include the California State
Automobile Association, Travelers Indemnity Co., and OneBeacon, which made
the payments when it operated as CGU California Insurance .