If gun owners are mandated to have insurance, new guns can be monitored. But what about the 300,000,000 guns currently held by individuals, including illegal guns? Clearly, no system of insurance, gun regulation, or police activity can deal completely with problems arising from such massive numbers. The system of chaining insurance responsibility “Top Down” works to retain guns in the system one there, and stolen or otherwise illegally acquired guns will retain the insurer of the last legal owner. But the outstanding guns in the hands of criminals and a good proportion of those owned by otherwise law abiding owners will not be enrolled in insurance without good reason.
Although it might be assumed that political considerations will mean guns currently owned will be grandfathered in, that does not have to be the case. Legislators could establish a policy whereby all guns must be insured. When state or national laws are adopted to require insurance for guns sold by manufacturers or passing through the hands of legal gun dealers, the laws can require that persons owning guns acquire insurance.
In spite of declarations in the media from some gun proponents that they will not comply with various proposed measures regulating firearms, most gun owners are legal and responsible citizens and will comply with a requirement after a reasonable period of time. They will be able to purchase insurance and have their gun’s serial number added to the database without revealing their names to anyone other than their insurer. Much of the insurance now sold to gun owners is now provided to them in association with the NRA, and there is no reason that this cannot continue for those who have concerns about insurers protecting their privacy. Of course, any insurer, even the NRA, would have to comply with financial regulation as an insurer and provide the mandated insurance compensations for victims.
The database suggested as a part of the “Top Down” system would provide a quick way for a law enforcement officer to check if a particular gun is insured. The database is designed to provide a quick way to find the insurer responsible for a particular gun, but contains no information about the gun’s location or owner. An officer finding the gun as part of an action for some investigation or arrest can check if the gun is properly covered. Guns are routinely and legally declared when they are shipped in luggage on airlines and may have to be declared when brought into controlled places depending on local laws. Insurance can be checked in these situations as well.
It’s hard to get thoughtful responses to the ideas published on this blog. Most comments are from people who simply assert their, usually negative, conclusions. When I get a response such as The Truth About Maryland’s recent post “Mandatory gun insurance: an interesting smart idea that won’t really work. A primer, from a finance and insurance geek,” I welcome the chance to look for new information or approaches to the problem of dealing with gun deaths and injuries. Insurance is a tool and gun injuries are a problem that to be addressed by that tool require that it be specifically adapted to the problem. For example, the parallels between automobiles and guns are striking because both are widely used instrumentalities that result in a substantial amount of death and injury; but this blog outlines differences in the best implementations of insurance.
One of the main feeders into the pool of illegal guns that cause a large portion of the deaths and injuries is those guns that are obtained through straw purchases. A straw purchase is one that is done by a person with a clean record that can pass a background check to obtain a gun for a prohibited person. For the purposes of this writing straw purchases are distinguished from other channels for guns to enter dangerous hands including:
Unchecked sales or gifts after the initial purchase
Theft of guns
Previously owned guns by persons who subsequently become prohibited persons
Guns used by persons who are not prohibited from having guns but who are clearly dangerous in hindsight
Much of this blog is about how insurance should be designed and how it would work if an ideal insurance mandate was in place. Opponents of such a mandate point out real and imagined problems that would prevent such insurance from working. When the possibilities are examined the problems turn out only to apply to particular models of insurance and can be avoided by designing the insurance for the particular nature of guns and gun violence.
But there are also transitional problems that could block adoption of an insurance mandate that would work well once it was in place. The most important of these problems is the fact that gun insurance that would protect victims does not exist currently. The insurance that is designed to protect gun owners from accidental or self-defense incidents is very narrow and is not adapted to the need to protect victims even to the extent that existing liability laws could allow the redress in the courts.
A federal requirement that all manufacturers and importers have insurance that protects victims of their products with a top-down provision requiring it to continue until replaced is the core of a successful system for guns. Ideally this requirement would specify the terms and benefits laid out in the next level for state legislation that seriously provides for victims, but this will describe the minimum requirements that should be specified on a national level.
The legislation should require that, before manufacturing or importing a firearm, insurance must be accepted by an insurance company specifically authorized to issue such insurance by some state. In order to make certain that the required financial stability is available, all such insurers should be required to join a pool backed by all such insurers guaranteeing each insurers ability to pay valid claims. Once an insurer accepts responsibility for a certain gun, that responsibility is only relinquished when another qualified insurer takes it on. Continue reading →
The insurance model recommended by this blog is designed to have insurer retain responsibility for guns after they are stolen. That means that if a responsible gun owner has a burglary and a gun is stolen and then after the gun changes hands, goes underground and turns up to injure someone in a distant location then the gun owner’s insurance will have to pay. Gun defenders are quick to object and say that the burglar and the shooter are responsible and the gun owner shouldn’t be held to account for their acts.
In those cases the criminals are, of course, responsible and if they can be caught and have resources they should be the first to pay to the injured party. Unfortunately, they often aren’t caught and they don’t have resources and, if they go to prison for their crimes, are unlikely to earn enough in the future to redress the damage they have done. So the question is should the legal gun owner or the gun owner’s insurance be held responsible in light of their role as enablers of this unfortunate situation. My answer is that they should be.
This post is a good place to start if you’re new to this blog. Scan the questions and follow the ‘Related:’ link(s) if you have an interest in a particular area. You may also want to check the category’s listed in the right hand column.
Q: What is the purpose of mandating gun insurance?
Required insurance for guns or gun owners should be designed to provide benefits for victims of gun accidents or violence. Insurers will automatically take appropriate steps to encourage gun safety as part of their loss control and underwriting activities.
Q: What specifically would be the best insurance system for guns?
Each state should adopt a system of no-fault insurance with a system of delivering medical and cash benefits directly to victims. This insurance should be required to be in place for any firearm brought into or kept in the state in order for that firearm to be legal. It should provide all of the benefits available to victims of motor vehicle or workplace injuries.
While it would be ideal to have a gun insurance adopted at a single time as one well designed national mandate, it’s likely that political reality will force it to come into being in stages. The logical place to start is for the more amenable states to require insurance for holders of permits to carry firearms in public. If this can be extended to general coverage of guns in some of these states, the stage is set for a federal mandate for top-down insurance which extends into any state requiring insurance. This in turn will encourage other states to have their own requirements in order not to have their citizens paying for insurance without their state receiving benefits for victims.
Concealed Carry as a Start and an End in Itself
Mandating gun insurance for holders of permits to carry weapons in public is much simpler than mandating gun insurance in general. Permit holders are already registered with state government agencies; there is no need for an additional registration system. They are generally responsible people who have already shown their willingness to cooperate with reasonable regulations. Insurers will find these people to be desirable customers. Most measures to deal with gun violence have to deal with the flood of illegal weapons that come from states with weak regulation of gun trafficking. But, states requiring insurance for permits can simply refuse to recognize permits from other states without insurance requirements or require proof of insurance in addition to such a permit.
The answer to the question of whether we need to mandate gun insurance at the federal or the state level is to have the mandate at the federal level and the regulation of the insurance at a state level. The special problems that guns have of illegally traveling across state lines to do their damage and of states varying so much in their willingness to regulate guns can be solved by this structure. The federal mandate should implement the top-down process for continuing insurer responsibility advocated by this blog. It should require that the insurance pay benefits to victims in accordance with the gun insurance requirement in the state where the shooting occurs.
One of the special difficulties that makes guns different than almost any other risk, is that move around from state to state so easily once they are in illegal hands. Much of the country has a relatively small problem with illegal guns and people there see no need to make access difficult. In other parts of the country, there is a major problem with death and injuries from illegal guns. No matter how carefully places like New York, Chicago and Washington, DC work to stop the transfer of firearms to dangerous people they cannot control the flood of weapons that come in from areas with more permissive policies. The process has been named the Iron Pipeline.
This blog believes that requiring insurance is a practical way to deal with the problem. Insurers that remain responsible for deaths and injuries from guns after they pass into illegal hands will set up conditions to prevent that passage. They will find ways to do this that are minimal inconveniences to legitimate gun owners. The question is how to get a requirement for such insurance into place in this environment. The states that sell the most guns are least likely to make such a mandate.
We have responsible ways to handle things which are dangerous but which are not made illegal because of their actual or assumed benefits to society. We look carefully at ways to contain the dangers and enjoy the benefits in almost every case. The exception is firearms, but we are just beginning to pull our heads out of the sand and examine this important subject.
First Principle — Mandatory No-Fault Insurance to Cover All Victims
One of the most powerful tools to facilitate a dangerous activity is insurance. Unfortunately, requiring insurance to cover gun violence has been looked at only as a way to penalize gun ownership or at least to transfer costs to gun owners. The result is calls for high limit liability insurance, usually with terms that make actual implementation unlikely. This blog argues that the tort/liability model is one of the least effective ways to increase safety and provide for victims. A No-Fault system similar to worker’s compensation or some motor vehicle insurance is much better. It needs to follow a gun that changes hands in a way to insure that all guns are covered.
Second Principle — Top Down Insurance Does Not Require Gun Registration or Owner Tracking
This blog also is advocating that insurance be required of gun manufacturers or anyone bringing a gun into the system in such a way that the insurer only relinquishes responsibility when another insurer (contracted by a new owner) takes it up. Insurance should remain in effect through any transfer legal or not. This would allow confidence that insurance was always in effect without tracking the gun owners. With a proper No-Fault system the victim would not have to even be told the name of the owner to collect compensation. All transactions by claimants or the government would be with the insurance companies.