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Insurance Tidbits
April 2019

Why is April my favorite month?

The world starts turning green in April, and the world begins waking up. Crocuses and daffodils push up through the snow, buds sprout on tree branches, the sun feels warmer, the frogs and birds start singing ... and the darned ants stage a comeback.

I have a thing for the color green, especially in April. Outdoors, the month starts in very dark shades. Then the trees sprout their yellowish-green leaves and, seemingly overnight, burst into that bright shade that waves bye-bye to winter.

Of course, my birthday is in April, and I'm really grateful for that day. I feel truly blessed and honored to still be alive, and active, and [hopefully] making a difference. As my dad used to say abou getting older, "it beats the alternative."

Whatveer April looks like in your corner of the world, I hope you're enjoying it and looking forward to that slide into barbecues, the beach, and bare feet!

IN THIS ISSUE

Insurance topics:
Other information from me:

A Little Lesson About Cannabis

I've been doing a lot of research on the subject of Cannabis lately for a series of webinars I'm writing and presenting. Here are a few brief facts, followed by details you might want to consider about discussing with your clients, ESPECIALLY if you live in a state that has legalized the medical or recreational use of marijuana.
  • Different varieties of the cannabis sativa plant exist
  • Some plants contain psychoactive (mind-altering) compounds, like THC, and others contain compounds that are not psychoactive, like CBD
  • When THC is inhaled or ingested, it eventually connects with cannabinoid receptors in the brain that influence pleasure, memory, thought, concentration, perception of time and feeling, and coordinated movement
  • CBD is a cannabinoid found in the hemp plant and has very low levels of THC (less than 3% by weight); it is only produced by a female plant's flowers and leaves
  • CBD is NOT psychoactive and is treated differently than cannabis products with higher levels of THC
Under federal law, the Controlled Substances Act categorizes marijuana as a Section I drug. Regardless of whether a state may legalize marijuana, or decriminalize it when it is not legal, the federal government considers the possession, use, manufacture, distribution, etc. of marijuana against the law.

At present 34 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands have enacted medical marijuana programs. Ten states have legalized the recreational use of cannabis (AK, CA, CO, ME, MA, NV, OR, VT, WA, and DC). Only three states have refused to legalize, or decriminalize marijuana in any way; those states are Kansas, Idaho, and South Dakota.

Here's the most important insurance issue to keep in mind. ALL property and casualty policies contain exclusions for property and acts related to criminal activity and/or the commission, or attempt to commit, a crime. For example:
  1. The ISO homeowners policy, specifically excludes coverage  for "the use, sale, manufacture, delivery, transfer, or possession by any person of a Controlled Substance as defined by the Federal Food and Drug Law at 21 U.S.C. Sections 811 and 812"
  2. The ISO Building and Personal Property Coverage Form excludes "contraband, or property in the course of illegal transportation or trade"
Even if a state has legalized marijuana, IF the insurance policy you issue to your clients contains one of the above exclusions, or a similar exclusion, your clients' losses will probably NOT be covered by their insurance policies.

Although California wineries were able to collect for losses sustained during recent wildfires, a legal business in the state was not able to collect for damage to its cannabis crop because of the wording in the policy exclusion. Similarly, a homeowner who was legally growing cannabis plants in her home wound up having an uncovered loss when burglars broke into her home, stole her plants and growing equipment, and also committed vandalism.

A recent article I read in the Insurance Journal discussed a lawsuit against a CA dispensary that allegedly sold pesticide-tainted marijuana. If you're interested in keeping informed about the subject of cannabis and insurance, here are a few links:
 

Did You Know...

  1. Cybercrime losses almost doubled in 2018, per FBI
  2. Facebook may wind up paying nearly $5 billion for its privacy practices
  3. Grateful employees are less apt to be dishonest
  4. More and more private insurers are selling flood insurance
  5. Some estate planning strategies cause insurance coverage gaps

Ridesharing versus Shared Cars

Ridesharing

Everyone has heard of Uber and Lyft. These businesses promote ridesharing and are Transportation Network Companies (TNCs). They use a ditigal network to connect drivers and riders via a smartphone app.

Ridesharing = hiring a car.

Taxi companies, for-hire car services, and limo services are all upset about the ridesharing competition. Why? Because TNCs aren't regulated the same as they are, they charge lower prices, and many consumers view ridesharing as more convenient.

From an insurance perspective, the unendorsed personal auto policy DOES NOT PROVIDE INSURANCE for a policyholder who uses his or her vehicle to drive for a ridesharing company. In fact, they specifically exclude coverage for either public or livery conveyance or transporting people or cargo for a fee.

A number of carriers do sell hybrid policies to insure this risk, endorsements to add to the personal auto policy, or coverage on a commercial lines policy. All the states but Oregon have laws in place that require all TNCs and drivers to have insurance in place. Most state TNC legislation also requires the TNC itself to provide insurance in the driver fails to comply with state law in this regard.
 

Car Sharing

Not everyone knows what car sharing is, but it's becoming more popular.  Think of Turo and Zipcar. These companies link people who own personal vehicles and hire them out to individuals who need a car for a few hours or days.

Car sharing = renting a car

Car rental companies view car-sharing companies as serious competition. Why? For the same reason for-hire car services are upset with TNCs: they're competition and they're cheaper and, some say, more convenient.

Personal auto insurance policies don't cover car sharing; in fact, a specific exclusion applies to the rental of the insured vehicle to others. According to conversation that took place on a recent webinar I attended, the NAIC and state regulators are not planning to require personal auto policies to provide coverage and they don't expect insurers to provide endorsements or options available for this exposure, either. However, the websites of both Turo and Zipcar indicate they provide coverage for the vehicles used in their car sharing programs.
 

More Resources


 

My Latest News

#1:  I'm nearly though the first draft of my current novel and need  someone who can do a quick read-through to verify accuracy of a few technical issues re: the IRS. If you know anyone who works in IRS Criminal Investigation, please ask him/her to email me. Thanks!
#2:  You will no longer see me on Facebook--I've cancelled my account; however, I continue to maintain my Linked In and Twitter accounts. In a related Social Media issue, I was very upset to learn that Google reads my personal emails and prepares a report of all my online purchases. I wonder what else it's doing...

Upcoming teaching schedule

A.D. Banker Webinars:

Apr 30 – 8:30 a.m. EST | Medicare

May 01 – 8:30 a.m. EST | Ethics: Delivering on the Promise

May 08 – 8:30 a.m. EST | 4-hour Annuity Suitability

May 10 – 8:30 a.m. EST | Cyber Security

May 15 – 8:30 a.m. EST | Professional Liability

May 21 – 8:30 a.m. EST | P&C Risks and Catastrophes

May 22 – 8:30 a.m. EST | Medicare

May 28 – 8:30 a.m. EST | P&C Risks and Catastrophes

May 29 – 8:30 a.m. EST | Anti-Money Laundering


Click here for more information, or to register.


 

Contact Information

Website: https://LindaMcHenry.com

Email address: Linda@LindaMcHenry.com

Business phone/text: 774.203.3157

Time zone: Eastern

Office hours: Weekdays, 9 a.m. to 4 p.m. Eastern

Please note: I am NOT by available by phone, text, or email during any CE class I teach, including the 30 minutes before and after the course's scheduled start and end times. You can find my teaching schedule on my website.

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Copyright © 2019 Linda McHenry, All rights reserved.


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