"The number of unknowns surrounding the gradual legalization of marijuana across the U.S. far outweighs what insurers currently understand about this enterprise," according to Claims magazine Editor in Chief Patricia Harman. (Photo: iStock)
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Question: The insured risk is covered under policy form DP-3 (9-83) with a SFP-1 (08-86) Standard Fire policy endorsement. The endorsement reads under the conditions section: Unless otherwise provided in writing added hereto the Company shall not be liable for loss as a result of explosion or riot, unless fire ensues and in that event for loss by fire only.
The loss is a result of an explosion from the tenant drying marijuana in a clothes dryer. The dryer exploded and caused direct physical loss to the walls, ceilings, and windows. The only fire damage noted was contained inside the dryer.
With the SPF-1 (8-86) language, is there coverage for the damages to the dwelling with no evidence of fire damage?
— California Subscriber
Answer: Any endorsement changes the provisions of the policy. If your endorsement excludes explosion and only covers ensuing fire, then the loss from the dryer explosion is excluded and the only coverage is for anything damaged by fire.
|Pot as personal property
Question: Our insured experienced a burglary from his residence. Among the items stolen were eight mature marijuana plants for medicinal use. We have verified that the insured has a legal California medical marijuana permit that states the crop was being grown entirely for his personal medical use.
We are attempting to determine whether the insured would be entitled to homeowners' insurance coverage under the HO-3, 4-91 edition's trees, shrubs, and other plants additional coverage.
Also, if the insured is afforded coverage under the additional coverage, and the number of mature plants the insured had exceeded the limit allowed by law, would we still owe for the mature plants he had or just owe the limit?
— California Subscriber
Answer: The policy does not define trees, plants, or shrubs. Merriam Webster Online defines 'plant' as, "a tree, plant, shrub, or herb planted or suitable for planting."
Since marijuana is dried and used like an herb, we say it falls under the coverage for trees, plants, and shrubs.
The policy does not get into legal issues, so whether the insured was over the legal limit of plants does not factor into coverage; there is no exclusion for plants over the legal limit. The insured should be compensated for the plants he had, and it is up to law enforcement to deal with the over the limit issue. In California, however, a doctor can authorize a patient for more plants than the legal limit, so that may have been what happened here.
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