Will insurance cover your marijuana if it's stolen from your home? Will it cover you if you use it as part of your treatment for a disease?
In a nation where 28 states and the capital in D.C. have legalized marijuana for various uses, that's a question worth asking on 4/20.
Colorado, Washington, Alaska, California, Maine, Massachusetts, Nevada and D.C. have all legalized marijuana for recreational use. Those states and Arizona, Montana, North Dakota, New Mexico, Minnesota, Michigan, Illinois, Ohio, Arkansas, Louisiana, Florida, Maryland, Delaware, New Jersey, New York, Vermont, New Hampshire, Connecticut, Rhode Island, Florida and Hawaii have all legalized it for medicinal use. However, the federal government still considers possession and use of marijuana illegal, and even the states where it is legalized for use have vastly different laws governing it.
That hasn't exactly clarified matters for insurers or their clients, but it has produced some solutions in that time. In 2014, Amy Allmon, a spokesperson for Allstate in Colorado, issued written statement saying that her company considers marijuana "just like any other personal property that is not subject to a specific exclusion or limitation with the policy…At this time there is no additional policy premium associated with marijuana."
In that state, marijuana is included under the personal property limit of the homeowners policy. If there is an accidental fire and a homeowner's stash burns in that fire, that's covered, too. Plants grown for licensed personal use would receive the same coverage as trees, shrubs, plants and lawns to the limits legally allowed.
Determining the value of said stash isn't easy, however. In Hawaii back in 2012, homeowner Barbara Tracy grew plants for medicinal use. When 12 plants were stolen, she submitted a claim to USAA for $45,600. USAA initially agreed to pay Tracy $8,801, but Tracy sued on the grounds that the insurer was undervaluing her claim. USAA countered that since marijuana is considered by federal authorities as an illegal Schedule I substance (similar to heroin or morphine), it didn't have to cover the loss at all. The court agreed, determining that Hawaii law didn't supersede U.S. law and that marijuana still qualified as an illegal substance.
Other states are a bit more lenient. In Oregon, for example, the Control, Regulation and Taxation of Marijuana and Hemp Act states, "No contract shall be unenforceable on the basis that manufacturing, distributing, dispensing, possessing or using marijuana is prohibited by federal law." In Connecticut, meanwhile, the medical marijuana possession limit of 2.5 ounces would amount to a loss of less than $1,000; or less than an insurance company would contend. However, in what Arcview Market Research considers a $6.7 billion legal marijuana market, those costs can add up quickly.