Category Archives: Possible Legislation

Hearing Held on DC Gun Insurance Bill

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On Thursday May 16, 2013 the District of Columbia held a hearing on the B20-170, Firearm Insurance Amendment Act of 2013 their Gun Insurance Bill.  The first panel consisted of Dan Gross, President of the Brady Campaign; Erin Collins from NAMIC; Tom Harvey, Gun Insurance Blog and Kris Hammond, Resident of DC.

The hearing was taped and the video is available here.  Written testimony from Dan Gross, Kris Hammond and Chester A. McPherson is here.  News coverage generally ignored the supporters of the bill.  For example see the Washington Post Story.

After preliminary remarks by Committee Chair Vincent Orange and Councilmember Mary M.Cheh (the bill sponsor) the first to present was Dan Gross who gave a good presentation in support of the bill outlining the seriousness of gun violence in the US.  He gave an example illustrating that current insurance does not apply even to many accidents, if it is available at all.  He stated that “it is absolutely unfair to saddle innocent victims with all the costs.

Erin Collins gave a presentation of the industries opposition to mandating insurance for guns.  It stated that this insurance was unnecessary and impractical and repeated that it couldn’t cover intentional acts.

Tom Harvey for this blog gave an oral version of the written statement below but added examples to counter the statement by MS Collins that insurance couldn’t cover intentional acts.

The panel was extensively questioned by Councilmembers Orange and Cheh primarily about issues of cost and effect of covering willful acts.  Chairman Orange had serious doubts about the willful act issue and in light of the opposition to the bill from the Mayor, it is likely that willful act coverage will be dropped.

The second panel consisted of Eric Goldberg, VP of the American Insurance Association and three residents.  All were opposed to the bill.  Mr. Goldberg began by questioning the contributions of this blogger, Tom Harvey, because of his not having experience as an insurance professional.  He stated his opinion that this situation would not meet any of the 3 classic conditions of insurability. (Measurable risk, sharable risk, and risk not subject to adverse selection).

The first panel took about an hour and the second panel about half of that time.  There was a third panel of officials of the Administration which summarized the bill and their role in administering it.  Chester A. McPherson, Deputy Commissioner of the Department of Insurance, Securities and Banking gave the Administration opinion that the bill was not needed.

After the testimony I asked Mr. Goldberg if the insurance industry was quietly studying the matter of insurance to protect gun violence victims and he replied “Why would I tell you that?”

The written submission from this blog is below.

I’m Tom Harvey, I write for Gun Insurance Blog. I’m a retired manufacturer.  I have no connection with the insurance industry.  I am here to support the bill.

Insurance is the way we deal, in our society, with potentially risky activities that can injure or kill.  Think about car accidents and workplace injuries.  Insurance companies make sure that individuals act responsibly or face consequences.  Requiring insurance for gun owners is very similar to requiring insurance for drivers or employers.

Gun insurance in particular will help in two ways.

§ First, it will encourage safe use of guns and safe storage of firearms.

§ Second, it will provide financially for the victims of shootings.

The bill being considered by the Council addresses common gun violence problems.

I think you would be surprised how few shooting situations are covered by insurance today, whether insurance from the NRA or homeowners insurance.  The neighbor kid comes over, gets the gun, and accidently shoots someone.  That victim can usually only get recompense by going to court against the legal gun owner.  This bill is good because it covers shootings by anyone, not just the gun owner.

We also know that most shootings are not accidental.  Guns are involved in homicides ranging from justifiable to heinous.  This bill is good because it doesn’t just cover accidents.  It also covers willful shootings.

A major problem is that guns get into the wrong hands.  There is another reason this bill is helpful.  The bill will require gun owners to promptly report lost or stolen guns.

The concept of requiring gun insurance has been discussed for 20 years.  It is now under consideration in at least 8 states, DC and the US Congress and the time for implementation as come.  After we have this kind of insurance, no one will believe it was once unheard of.

You will hear from others that insurance can’t cover intentional or criminal acts.  This is simply not true. There are many kinds of insurance in common use today that do pay out to innocent persons when insured persons become bad actors.  The key is they are designed to protect others and not just those who buy the insurance.

Gun insurance must be mandatory to be effective, not only to guarantee that it exists, but because only then will a market for the insurance appear. The insurers loss rates will normalize and premiums will adjust to reflect the real risks in the many circumstances of gun ownership.

Insurance trade groups, who seem to reflexively object to any requirements or regulations concerning insurance, claim various barriers to mandating gun insurance.  Few of these claims stand up to even cursory logical scrutiny and the ones that do only apply to the situation of thinly sold protection designed for the benefit of the gun owner

This bill requiring guns to be insured is good for safety, good for victims, good for gun owners, achievable and affordable.

Looking at PCI Statement on Gun Insurance to Connecticut Legislature

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The insurance industry through its trade group spokespersons has been very negative on the possibilities of dealing with the gun violence problem by means of requiring insurance. The legislative proposals made so far have all been very narrow calls for conventional liability insurance sometimes with high limits. The trade groups have been quick to jump on the limitations of that approach and on projected difficulties with implementation. The quotes in various new articles have been very hostile to gun (and actually all) insurance.

In a statement made to the Connecticut State Legislature on March 19, 2013 the Property Casualty Insurers Association of America (PCI) made a more carefully worded opposition to such insurance. This allows an analysis of the reasons for the reservations of the insurance industry on this matter.

PCI opposes this legislation because it will be ineffective in curbing gun violence and will create significant burdens for law abiding gun owners and insurers. As a general rule, PCI opposes mandating the purchase of liability insurance. We have found that mandatory insurance requirements are often ineffective and serve only to add enforcement and administrative costs for both government entities and insurers.

The comparison with motor vehicle insurance is relevant here in showing that this is a ridiculous statement. While it varies greatly from state to state, in many states motor vehicle insurance is mandatory, enforced and highly effective in compensating injured persons. In states where it is not effective, it is because insufficient insurance is mandated or enforced.

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DC Bill on Gun Insurance B20-170 Hearing

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The bill in the District of Columbia Council, B20-170, requiring insurance for guns will have a hearing at 10AM on May 16, 2013.  The text of the bill requires liability insurance of $250,000 for gun owners.  It provides for willful acts.

(b) The insurance policy required under subsection (a) of this section shall specifically cover any damages resulting from negligent acts, or willful acts that are not undertaken in self-defense, involving the use of the insured firearm while it is owned by the policy holder.

The announcement of the hearing provides for written statements until May 30, 2013.

New Analysis on Guns, Insurance and the Second Amendment by Lund and Gilles.

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A paper “Mandatory Liability Insurance for Firearm Owners: Design Choices and Second Amendment Limits” has been published by Nelson Lund of the George Mason U. School of Law and by Stephen G. Gilles of the Quinnipiac University School of law. While there have been simple calls for requiring gun insurance and comparisons of guns and cars at various times, Nelson Lund’s paper of 25 years ago “The Second Amendment, Political Liberty, and the Right to Self-Preservation” in the Alabama Law Review is the only serious and significant source known to this blog to address the issue prior to the Sandy Hook incident. The title of the new paper fairly describes its focus. Many issues of interest to those who want to think about the possibilities of using insurance to protect the public and compensate shooting victims are raised.

The authors of the paper are among those who believe that the Second Amendment gives individuals wide gun rights and that the narrow findings of the Heller decision only start to describe the limits of governmental regulation in this area. Others believe that Heller was the product of a momentary and ideological combination of justices which will not be expanded and will eventually fade in importance or even be overturned. The paper takes the view that, even under the broad interpretation of the Second Amendment, mandated insurance may have a role in containing gun violence. It does, however, see that role as being much more limited than does the author of this blog.

While this blog does not consider the Second Amendment as a major barrier to implementing effective gun insurance, many others do. This new academic analysis by widely respected conservative philosophers and thinkers is very valuable in laying out the nature of that objection. The paper should be read and considered carefully by anyone who is serious about understanding the possible role of insurance in dealing with America’s gun violence problem.

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North Carolina Added to States with Gun Insurance Bills

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A bill HB976 has been introduced in the North Carolina Legislature.  It has several gun control provisions including $100,000 in mandatory gun liability insurance.  This insurance goes farther than in most other states by applying to willful acts and to unreported stolen guns.  The bill introduced by Rep’s Luebke, Insko, Harrison and Adams has 7 sponsors so far.  It was introduced on 4/17/13, showing that momentum to deal with gun violence is continuing and that insurance is seen as a part of the solution.  There have now been bills introduced in 9 states and the US House.

Suggestions for HR-1369 Firearm Risk Protection Act of 2013

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Representative Carolyn Maloney along with 8 cosponsors has introduced a bill,  H.R. 1369 – Firearm Risk Protection Act of 2013, to require that gun buyers and sellers have “qualified” liability insurance when they make a transaction or continue to own the gun.  They would be fined up to $10,000 if they do not have and maintain the insurance.  The text of the bill does not define “qualified” and gives no further details.  I spoke on the phone with Rep. Maloney’s press contact and was told that the bill will be filled out with more detail in the future.  In this diary, I will lay out the principles and elements that should be considered when the bill language is developed.

Gun insurance should serve to protect victims and promote safe storage and use of firearms, without being an excessive burden on gun owners (for a description of possible insurance see here).  Unfortunately, conventional liability insurance as sold, for example by the NRA, is designed only to protect the gun owner not third party victims.  Gun insurance, like any insurance that is mandated by government or required as a condition of doing business, should be designed to protect those injured by an incident.  Moreover, it needs to protect the public by encouraging safe practices.  Currently, gun insurance only protects the gun owner from theft and lawsuits. Continue reading →

Firearm Risk Protection Act introduced in Congress H.R. 1369

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For details on the recommendations by this blogger on how to implement this bill and have this insurance see my the April 2 post on Daily Kos

A bill titled the Firearm Risk Protection Act  has been introduced by Rep. Carolyn Maloney in the national Congress. As of March 29, 2013 there is not text available on Congress.Gov but the bill has been referred to the House Committee on the Judiciary. Rep. Maloney’s press release states that the bill will impose a $10,000 fine if an owner does not have the required coverage. It exempts service members and law officers.

Other details have yet to be developed. Rep. Maloney’s press aide stated that in a phone call and email that “like all legislation, it was meant to start a conversation about national priorities” and welcomed input to the process. This blogger will certainly be following the bill and recommending that it be done in a way that provides the maximum protection to victims. It’s likely that the bill authors have in mind a relatively simple model of Liability insurance which could be improved by adding provisions to:

  1. Follow guns as they are lost or stolen
  2. Eliminate provisions to limit coverage for intentional acts
  3. Eliminate requirements for negligence by gun owners
  4. Require steps it aid identification of the responsible weapon

The bill has 8 cosponsors so far:

  1. Keith Ellison MN-5
  2. Eleanor Holmes Norton DC
  3. Michael E. Capuano MA-7 20
  4. James P. Moran VA-8
  5. Bobby Rush IL-1
  6. Niki Tsongas MA-3
  7. Stephen F. Lynch MA-8 202-225-8273
  8. Earl Blumenaur OR-3 202-225-4811

Oregon SB-758 First State Bill for Effective Gun Insurance

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Senators Dingfelder and Burdick with Representative Denbrow have introduced a bill in the Oregon Legislature (SB-758) which is the first effective plan for gun insurance that would provide for victims. It works by imposing strict liability on a gun owner for injuries associated with a gun even for one year after the gun is lost or stolen. There is no limitation to economic damages as is typical of no-fault motor vehicle insurance. The limits are set quite high at $250,000 for physical injury or death. Continue reading →

How It Could Work

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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.

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Funding the Uninsured Gun Pool

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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.