In this week’s podcastepisode, I talk about how insurance agents can help their policyholders prepare for hurricane season. Here are a few excerpts from the podcast, along with resources that appear at the end of the post:
Did you know?
Hurricane season begins on June 1 in the Atlantic and on May 15 in the Eastern Pacific. In all locations, it ends on November 30.
The biggest threat during a hurricane is storm surge–especially at high tide.
The National Weather Service reports that the number of hurricanes keeps growing each year.
During high winds, the 4 biggest areas of weakness in any building are its roof, windows, entrance doors, and garage doors.
Not all property insurance policies provide coverage for wind–especially in coastal states.
NO standard property insurance policies provide coverage for storm surge caused by a hurricane. This is because, in most states, it is considered a form of flood–which is an excluded peril.
This week, I ventured down a slightly different path on my podcast. I talked about COVID and insurance, but more about what I believe we need to consider for the future rather than about what is happening today.
Barb Gavitt is Vice President of Product Development and Education at A.D. Banker & Company, one of the leading insurance pre-licensing and continuing education providers in the country. She is also the 2020 president of the Securities & Insurance Licensing Authority.
Barb sat down with me recently to discuss the challenges many have been facing, and continue to face, in light of the COVID-19 pandemic shutdown. Although the insurance and financial services industries have been deemed “essential” during shelter-in-place orders, the licensing test centers were not.
This means that individuals who were already hired to work in the industry could not obtain their licenses, despite having paid significant fees and devoted tremendous amounts of time studying. Similarly, those wanting to be hired or wanting to obtain an additional license or line of authority on an existing license find themselves equally frustrated and stymied.
On Episode 6 of my podcast, Taking the Mystery out of Insurance, Barb explains what’s been happening to date, how the states are opening up now, and what she anticipates in the future.
In prepping for the SILA Foundation webinar I presented yesterday, I have two items to share with you since the last time I blogged on the topic of cannabis.
Topic #1: Decriminalization
A number of states have decriminalized marijuana. Contrary to what many people infer from the term “decriminalized,” it does NOT mean a person is not guilty of a crime of possessing, growing, or selling marijuana. Unless the state has passed a law that stipulates the medical, or adult recreational, use/possession/sale of marijuana IS legal, it is still a crime.
What the term means is that if a person has a “small amount” of marijuana in his or her possession, law enforcement will not arrest and charge that person with a crime. However, law enforcement may still confiscate the marijuana and the person can be fined for possession. Each state defines “small amount” differently. The most common amount is less than 1/4 of an ounce.
So, what does this mean? Let’s say I’m driving along the road in a state that has not legalized the medical or recreational use of marijuana, but has decriminalized it. A cop pulls me over for speeding and spots the ounce of pot I have sitting in the cup holder in my console. The cop can arrest me for illegal possession, I can be charged and found guilty of a crime, and I can be fined or jailed–however the state punishes that particular crime.
But, if the pot in the cup holder is less than the “small amount” defined by that state’s law, the cop can confiscate my pot (or not) and he can issue a citation that results in a fine (not a crime) for illegal possession ( or not).
Topic #2: Court-Enforcement of Contracts re: Cannabis Businesses
A recent ruling by the Nevada District Courtshows that federal courts are handing down different findings with respect the the enforceability of contracts to which cannabis-related businesses are a party.
If you want the full story, click the link above. Here’s the short story:
When a cannabis business sues or is sued over breach of contract, the federal courts seem to be taking one of two positions:
If the matter at issue relates to insurance, federal labor laws, federal intellectual property rights, and other contracts and laws not directly related to the growth, sale, etc. of cannabis, they seem to be ruling in a way that enforces the contract. Why? Because enforcement of the contract does not violate federal law under the Controlled Substances Act, which deems marijuana a Schedule I substance–and illegal under federal law. In other words, if I own a cannabis dispensary and lied on my insurance application about whether I use a safe, and my insurance company later denied my insurance claim for theft, the court will likely enforce the contract and side with the insurer (if it has proof I lied and violated the warranty about the safe).
If the matter relates to a contract that are directly related the growth, sale, etc. of cannabis (such as a loan to expand the business), they seem to be ruling in a way that does not enforce the contract. In other words, if I failed to repay the loan I secured to expand my cannabis dispensary and the lender sued me to get the money back, the court will likely NOT find in favor of the lender suing me because I breached the loan agreement. Why? Because finding for the lender puts it in a position where it benefits from assisting an illegal cannabis business conduct operations–which violates federal law under the Controlled Substances Act.
Summary
How we insure cannabis risks in this country is ever-evolving and so long as federal and state laws differ with respect to legalization of marijuana, we’re in for a wild and exciting rollercoaster ride. Check back for more updates as they become available.
