The best system known to this blog for insuring guns to provide for victims, discourage unsafe practices and not excessively burden gun owners is a Top-Down no-fault personal injury protection insurance system similar to the way that motor vehicle insurance currently works for pedestrians in NY state and Michigan.
If a good solid system of insurance that pays everyone injured by guns is adapted, an obvious question will be “should it cover suicide.” This is likely to be controversial because many people think that payments to survivors would encourage persons thinking of killing themselves. The issue has been worked out for regular life insurance by having “incontestability clauses” which allow such coverage two years after the policy goes into affect. The idea is that a person is unlikely to plan that far ahead which handles the insurers concerns about the hazard of selling insurance to one who knows that it will be soon be paying the benefit.
Social Security pays survivors benefits after the suicide of a parent or spouse who has been married for more than 9 months. In some cases life insurance paid for entirely by employers will pay in cases of suicide with out a waiting period. The requirement is that the insurance be given automatically by the employer and the employee not contribute to the cost. In that case the insurance may or may not have a suicide clause. It seems unlikely that a person will take a job to get insurance covering their planned death and it seems unlikely that a person will buy a gun to get insurance rather than commit suicide in some other way. Continue reading
An article in Bloomberg by Elizabeth Bunn titled “U.S. Insurers Resist Push to Make Gun Owners Get Coverage” has been picked up by various sites on the web. The American Insurance Association, a property-casualty trade association is quoted as saying that gun insurance could have an effect of more gun violence by owners who have less at stake and that “Property and casualty insurance does not and cannot cover gun crimes.” They must be talking about current liability insurance which is written for the benefit of the first party insurance (and gun) owners. They also quote Bob Hartwig president of the Insurance Information Institute as saying “Insurers will not insure illegal acts.”
Insurance which is required for the benefit of third parties injured by some kind of activity often works differently. For example, if in some incident of road rage an insured person intentionally smashes into your car can you collect from his (probably not her) insurance? It varies from state to state. In Texas you can’t, in Massachusetts you can as decided in Cannon v. Commerce Insurance Company, 18 Mass. App. Ct. 984 (1984). In other states there has not been any court decision on the matter and it may depend on the details of language concerning who is an insured party.
In many business situations an intentional act on the part of one insured (often an employee) may create a liability on the part of another insured (the business or corporation itself). Businesses want to protect against such situations and insist that insurers put a “separation of interests” clause in the insurance contract. For an example of a court decision applying that to intentional acts see Minkler v. Safeco Insurance Company of America, (Cal. Sup. Ct., S174016, June 16, 2010). The effect of this is to treat each insured party separately so the the business is insured even if the employee has done an illegal and intentional act which cannot be insured for the employees benefit because of a doctrine of public policy. A more wide ranging example might be a performance bond taken out by a construction company for the benefit of their customer. It protects the customer even if the contractor cheats and steals funds.
The point is that insurance to protect victims of gun violence can and should be structured for that purpose. The model of first party liability insurance is not very good here. No-Fault insurance is a better model. It’s not necessary to have all the characteristics of No-Fault such as the victim’s insurance(if any) paying first, but that would be OK. The use of a pool to cover unknown or uninsured gun owners is very desirable. The one in use many No-Fault states would work for guns.
The proposed laws in various states, most recently in NY, which would mandate liability insurance as a condition of having a gun license do not give details in the type of insurance required other than “liability” and a specified limit. It’s probably for this reason that the Insurance Industry is not yet taking the possibility of requiring insurance to protect victims of gun violence seriously. The insurance industry has found a way to help with almost any risk in the past, except perhaps for flood insurance which would also be possible if universally mandated. There are many published lists of “Principles of Insurability.” Gun insurance measures up well to them. In particular, a general requirement for such insurance will prevent adverse selection. Bob Hartwig also stated “they can’t require companies to offer that coverage.” Insurance companies require a suitable market and insurance structure to provide coverage. That is quite possible for gun insurance. The insurance industry needs to be a part of designing that structure, so far they have not engaged.
A plan for No-Fault insurance for guns must take into account the fact that many of the shootings are likely to be in situations where the gun cannot be traced. Even if a large portion of the guns in existence are brought into the system, there will be many claims where no specific insurer is available to pay. In NY the Motor Vehicle Accident Indemnification Corporation (MVAIC) and in Michigan the Michigan Assigned Claims Plan (MACP) are available if there is no other insurer. The large costs in Michigan where there is unlimited coverage for medical expenses have generated a lot of political backlash. The Michigan Catastrophic Claims Association pays claims over $500,000 and assesses insurance companies $175 (2012) per vehicle. Funding works by having insurers pay on the basis of either a percentage of premiums collected or a fixed amount per vehicle. A system for guns could work in the same way.
Approximately half of the medical costs are now covered by Medicare or Medicaid. If gun insurance is the primary insurance only for identified guns and the Uninsured Pool is secondary to all other insurance the funds needed would be greatly reduced. Unidentified or uninsured guns do not contribute to the incentive for insurers to have loss reduction conditions or programs in any case, so making gun insurance secondary should not undercut the safety benefits of having insurance. It would also give states an incentive to identify the guns involved in injuries to save on Medicaid expenses.
It might also be desirable to have the Uninsured Gun Pool pay claims for incidents that occur after some fixed time has elapsed for guns that are reported lost or stolen. If the time is fairly long the cost would not be too great and would give an incentive for reporting losses in a timely manner. It would make things more predictable for insurers and may help establish a robust market for gun insurance.
When a proposal for requiring insurance for guns is put into a blog discussion, many of the strong pro-gun advocates reacting to the post base their objection on rights as they assume they have them from the second amendment to the US Constitution. These assumptions can be very broad. And I see statements such as “what other rights do you have to pay for?” and “paying for gun insurance is like a Poll Tax.”
Well, I see us paying taxes on the means necessary to exercise a right all the time. Look at your phone bill, it’s full of taxes on a means to communicate. You have a right to travel, but pay taxes on cars and on air and rail tickets.
Poll taxes are really obnoxious, especially the way they were historically used, but they were not found to be unconstitutional until a specific amendment (The 24th Amendment to the US Constitution) was adopted. There is no similar amendment for gun rights. It’s interesting that rather heavy taxes for automatic weapons have never been found to be unconstitutional.
District of Columbia v. Heller is a very narrow decision in itself. It only overturns an extremely restrictive law that totally prohibits gun ownership. Later the court extended it to state laws in another case, McDonald v. Chicago. Since then lots of restrictions on gun use and ownership have been upheld by state courts. Whether the Supreme Court will strike a broader range of gun restrictions in the future is unknown. While lots has been written by legal scholars about the subject, the future path of this law will probably be determined by political considerations. Heller was supported by 5 justices with a strong dissent by 4 justices. It’s possible that it could be rolled back to the old view that any right to bear arms did not apply to individuals or it’s possible that it could be broadened.
As far as insurance is concerned, the system supported by this blog only requires regulations applied to the manufacturer of guns. Any requirement that the insurance be transferred to the subsequent owner, as would be needed to let the manufacturer’s insurer relinquish responsibility, would be a private contract.
On Jan 26, 2013 according to the Pennsylvania State Police 50 guns were stolen from the Taylor and Robbins Gun shop which had been closed for about six years but still had old stock on the location. Two burglers broke in and escaped in a vehicle.
Nearly all of the guns that are in illegal hands or used in crimes in the United States started out as legal guns and by some means passed out of the control of their legal owners. Many of these are due to purchases by straw buyers acting for an inelegible person but many others are due to loss or theft. If an insurance company was still responsible for these guns, it’s very unlikely that they would remain for six years in such a vulnerable situation.
We’re not taking guns seriously in this country, insurance is a big step to becoming responsible.
An article, “Gun used to kill N.Y. cop came from Virginia” published 1-26-13 in the Virginian-Pilot illustrates the kind of gun leakage from legal to illegal hands that insurance could discourage. Colleen Long writes that a robbery in 2011 resulted in the death of a New York City police officer, who was shot in the head. As our system for tracing guns that turn up in crimes relies on records kept by federal licensed dealers, the 9mm semi-automatic Ruger pistol was found to be sold legally in 1999 by a dealer in Colonial Heights, Va.
The buyer of the gun in that legal transaction said that the gun was in possessions he had packed but had ended up abandoning, when he was evicted from an apartment. The story linked above is interesting with more details.
One obvious question is, do we believe the story about the loss of the gun? A Ruger 9mm is not an especially valuable gun. According to firearmspriceguide.com a used one is worth about $200 to $400 depending on condition. A person being evicted may very well abandon a lot of stuff, so it could be true. But the gun did drop into illegal hands and end up in New York. If an insurance company had responsibility for for that gun that continued after it was lost, that insurer would have a strong incentive to require the owner to keep control of the gun. The value of the gun itself was not sufficient motive.
The laws of the State of New York couldn’t stop the gun from being illegally brought from Virginia. The laws of Virginia don’t insure that owner keep track of guns in a way that prevents their loss, illegal sale or abandonment. An insurance company on the hook would, no doubt, require the owner to periodically demonstrate that the gun was still under control. There would be some financial committment on the part of the owner, sufficient to convince the insurer that the gun would stay in legal hands.
This story is special because the victim was a police officer, which provided the motivation for tracing the gun and for the paper writing about it. Thousand of other killings with illegal guns are similar in many ways. As the article says 85% of the illegal guns in New York come from out of state.
There is a nice article “Even with health insurance, medical bills can mount for shooting victims,” on InsuranceQuotes.com by Lisa Shidler. It talks about the $2.4 million for treating the people wounded in the Gabrielle Giffords incident and a number of other subjects. Actually, after negotiations with insurance companies the amount to be paid will be reduced to an estimated $565,000 or $43,462 for each of the 13 wounded persons.
The article links to the Pacific Institute for Research and Evaluation which has a table of costs for gun violence which gives a lot of interesting figures. Of interest to this blog is the average medical cost $49,947 for the medical expenses of each hospital admitted non-fatally injured person. Costs are much lower, $1,146, for persons treated in the ER only. It also gives total medical costs for firearm injuries at $2.88 Billion for 2010 of which almost exactly one half is paid by Medicare or Medicaid. To put it into scale, the total medical costs for firearm injuries is about $10.00 per year for each of the 270 million guns in private hands in the US.
Loss of worktime, which is covered by Personal Injury Protection for motor vehicles in most no-fault states, is about twice as much as the direct medical costs.
Insurance coverage for firearms victims is important in order to insure that the care is actually delivered. These figures show that the overall costs need not be a big burden to gun owners.
There are many similarities between motor vehicles and guns, because they both have a built in danger but are present in our society. There are also important differences in the way they are used and the situation surrounding that use. The specific top down, no-fault system of insurance being analyzed in this blog is intended to deal with these differences.
1. The vast majority of car deaths and injuries are accidents; intentional injury with a car is rare. The majority of shootings are intentional whether or not they constitute crimes.
Writing about No-Fault gun insurance that provides an incentive for each successive owner to have insurance, one of the most common concerns in the comments was that insurance would protect criminals and wrongdoers.
Defenders of gun rights in articles and comments often seem to be writing from an assumption that the typical person who is shot is some sort of intruder or attacker who ran into the unexpected self-defense by an armed good guy. They often complain that media don’t cover such events. I don’t see much evidence, especially convincing evidence, to back that up. For example, Kleck and Gertz’s famous 1994 Survey claimed that there were about 2.5 Million incidents in which victims used guns in self-defense. Many of the loose figures in circulation come from this number. It was calculated by applying a 1.366% positive response on the survey to the estimated 190.5 Million households. This method has received a lotof criticism because of the likely possibility that no matter how low the real number was it only took a very small percentage of persons surveyed answering falsely to make up 1.336%. I expect you could get that many people to claim just about anything you want (say that they had ridden on a flying saucer in the last year) if you are taking that kind of a survey.
It’s really hard to get recent good figures on the nature of the shootings. Real data on most issues comes from government agencies collecting it from local sources and using their powers as part of federal government to insure that it is reported to them with a good bit of completeness and with consistent methods. That process has been shut down by political processes that oppose collection of data and examination of the subject. See Arthur L. Kellermann, MD, MPH and Frederick P. Rivara, MD, MPH “Silencing the Science on Gun Research” in The Journal of the American Medical Association.
So I’m looking at the log of news reports of gun deaths which you can get by following @GunDeaths on Twitter or use the excellent page on Slate which tracks it. I read the last 50 deaths reports as of this morning (January 8, 2010) and found that 7 were shooting by police, 1 was an accident, 2 suicides and 4 that were murder components of a murder/suicide. The rest were just plain murders by bad guys. It’s a pretty small sample but easily big enough to show that self-defense by innocent parties must not be common, in order to have it not appear at all. It’s likely that local media don’t usually report suicides; but it’s hard to imagine, they wouldn’t jump on the high reader interest that a real self-defense shooting would have. So I’m concluding that when a through study is done that gun insurance would not be protecting attackers killed in self-defense by legal gun owners. It does leave the question of whether, persons killed by police should be covered. I do imagine that there would be a resistance to insurance investigations to discover whether a person killed by police was actually committing a crime.
Crossposted to guninsuranceblog