Large players in the insurance industry are typically staying away from the drug, even where it’s legal.
California Insurance Commissioner Dave Jones is seeking to improve the cannabis insurance availability in the state. The primary issue is that large insurance companies are hesitant to provide coverage in this portion of the industry.
The United States is regularly launching regulated and perfectly legal markets in which patients can shop.
Despite the fact that these markets are indeed regulated and legal, insurers, like banks, have stayed away. Jones is seeking to change that situation in order to make the drug more affordable to those whose medical conditions warrant its use. This former Sacramento City Council member and California lawmaker decided to hold a number of meetings. The purpose of the gatherings will be to provide major insurance companies with an education regarding medical marijuana. The goal is to convince those insurers to begin offering cannabis insurance within the Californian industry.
Jones feels that much more cannabis insurance is required in the state’s market to promote competition.
“I’m a big believer in competition,” Jones was saying in a media report. “Through competition we get better pricing, better quality and more choice in products.”
Typically, medical marijuana businesses that have insurance policy coverage have been using surplus line insurance for their protection. That type of policy was designed to cover the types of risk that are too high for a traditional insurer to want to absorb. In most cases, surplus line insurance is far from cheap. In fact, some companies feel they can’t afford to pay the high premiums. Moreover, these policies also often have more rigid requirements than licenses carriers.
The Californian efforts may start to draw major insurance companies into the medical marijuana market. This could help to develop a broader spectrum of policy options in other states that have also legalized cannabis. Should the situation work out smoothly, it has the potential to improve coverage and reduce costs.
Working out the cannabis insurance issue is increasingly important in California as it moves ahead in issuing state licenses for adult-use and medical dispensary businesses.