Funding the Uninsured Gun Pool

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.

 

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