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Your friend Joan was growing 3 cannabis plants in her home in Hawaii, intended as medical marijuana. Just as the mature plants were almost ready for harvest, the heat lamp malfunctioned and caused the crop to burn in a small fire. Joan submitted a claim under her HO policy, and wants to know if coverage is available.

Notable Timestamps

[ 00:16 ] – Joan’s plants were valued at $2,000 each, and she wants to know if there is any coverage under 2011 ISO HO3.

[ 01:19 ] – Tim, Mike, and Alissha banter about Superbowl squares, “medical” marijuana, and the Ohio legislature.

[ 03:03 ] – The plant may seem permanent, but you would probably take it with you, so it likely wouldn’t be considered part of the “dwelling.”

[ 04:20 ] – The policy may have Additional Coverage for trees, shrubs, and plants limited to $500 per plant, but that would only be triggered under Coverage A and B after the plants were considered to fall under the “Land” exclusion. This claim falls under Coverage C, which would not apply the $500 per plant cap.

[ 05:20 ] – But isn’t marijuana illegal? Section II excludes controlled substances, but Section I does not, and there’s no “illegal property” exclusion there. CP and BP forms also exclude contraband.

[ 06:12 ] – There are a couple of hidden exclusions, namely a social implication that what you’re insuring is lawful property.

[ 07:45 ] – The group discusses the uncertain legality of marijuana.

[ 09:46 ] – Another “hidden exclusion” is fortuity – insurance doesn’t cover “costs.”

[ 10:40 ] – Joan’s cultivation of these plants is legal under Hawaii law.

[ 12:30 ] – Tim discusses the split among courts, including Tracy v. USAA Casualty Insurance Co., Civil No. 11-00487 LEK-KSC., 2012 WL 928186 (D. Hawaii 3/16/12) [reviewed at PLRB, Prop. Ins. L. Rev. 8428 (2012)] and Green Earth Wellness Center, LLC v. Atain Specialty Ins. Co., 163 F.Supp.3d 821 (D. Colo. 2/17/16).

[ 14:15 ] – The 2022 ISO form specifically excludes cannabis under most situations.

[ 16:30 ] – Tim provides a recap of the scenario and the points above.

Your PLRB Resources

Homeowners Policy Annotations – Trees, Shrubs and Other Plants (HO43) –

Webinar on Product Liability Cases Involving Emerging Risks: Vaping/Marijuana/Toxic Torts –…

Coverage Question on “Theft of Marijuana – Covered Under a Homeowners Policy?” –

Employees of member companies also have access to a searchable legal database, hundreds of hours of video trainings, building code materials, weather data, and even the ability to have your coverage questions answered by our team of attorneys (…) at no additional charge to you or your company.

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The views and opinions expressed in this resource are those of the individual speaker and not necessarily those of the Property & Liability Resource Bureau (PLRB), its membership, or any organization with which the presenter is employed or affiliated. The information, ideas, and opinions are presented as information only and not as legal advice or offers of representation. Individual policy language and state laws vary, and listeners should rely on guidance from their companies and counsel as appropriate.

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