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.
Top-Down as it’s used on this blog is not a standard insurance term. It means that insurance would be required only of the entity which brings a firearm newly into the system. It could be a manufacturer, an importer or, if the existing stock of guns is being brought in, one current owner. The required insurance should have terms that allow an insurer to relinquish responsibility only if responsibility is taken up by a new insurer on these same terms. All guns would have a responsible insurer because any break in the chain would leave the last insurer responsible. Guns which are lost or stolen remain the responsibility of the last insurer. There needs to be a system for tracing the responsibility to the insurer as of the date of an incident leading to a claim, but it is not necessary to know where the gun is or who owns it. This means that there is no need for government entities to register guns or interface with individual owners to enforce the system.
There are many systems of No-Fault insurance in use for motor vehicles and in other situations. The essential element is that benefits not be dependant on negligence or fault on the part of someone. Historically, the reasons for adopting No-Fault systems is to have benefits paid quickly, to all injured persons and without the expense of litigation. This element is critical to providing for victims of gun violence. Other elements sometimes found in No-Fault motor vehicle insurance include having the victim’s insurance pay first and relieving negligent parties of some or all tort liability. These elements are not desirable in the case of gun insurance.
There should be a pool to pay benefits to persons injured where no insurer is identifiable to make payments. In the states with No-Fault personal injury protection this pool is generally funded by assessing insurers on the basis of the premiums that each insurer collects. It is desirable to keep this pool as small as possible, so it should only pay after other sources are exhausted.
No-Fault insurance generally has a hierarchy sources of benefits responsible for paying claims in particular cases. Gun insurance should be at the top to motivate insurers to encourage safe practices, the pool should be at the bottom. States, in the case of motor vehicles, have been quite creative in identifying secondary insurance sources. For persons injured by guns in this system a recommended order, quite similar to the typical one for motor vehicle No-Fault insurance, is:
- Gun Insurance attached to the firearm causing the injury.
- Gun Insurance attached to another gun owned or possessed by the shooter.
- Gun Insurance attached to a gun owned or kept in the household of the shooter.
- Gun Insurance attached to a gun owned or possessed by the victim
- Any applicable non-gun insurance such as household, liability, medical, Medicare or Medicaid.
- The pool for payment in cases of unknown or uninsured guns.
The limits to payment for insurance in the case of vehicles vary widely from as little as $10,000 through $50,000 in NY State and to unlimited lifetime medical benefits in Michigan. Death benefits are generally smaller. As gun injuries can be quite severe limits should be substantial for medical care. About one half of that cost is currently paid by Medicaid and would be saved to the taxpayers. A significant death benefit with coverage for suicide is important to motivate safe practices. Exclusions for victims engaged in criminal acts should be handled with care. Alleged, uncertain, prior or minor criminal behavior should not block benefits.
People reacting to this proposed system, if they are not extreme either in wanting to punish gun owners or in wanting not to hold them responsible at all, commonly worry that it might not be possible for insurance to cover intentional or illegal acts. The benefits here go to the victim not the shooter. It may be important to limit secondary benefits such as relief of tort liability to shooters. There are many kinds of insurance in common use today that provide benefits to innocent third parties for the intentional or illegal acts of otherwise insured parties. Examples include:
- In some states required motor vehicle liability insurance must pay innocent parties harmed intentionally by insured drivers.
- Standard homeowners insurance usually has a “open mortgage clause” that would pay a lender for arson by the owner.
- Business liability insurance often has a “separation of interests clause” that protects the company in the case of intentional acts of employees.
- Performance bonds often pay if the contractor absconds with the funds.
For centuries, the insurance industry has been able to find creative ways to deal with almost any risk that is important to society. It has a long record of facilitating activities while reducing the harm of unavoidable risk. It seems that both the need to reduce the harm associated with guns and the demand that guns be widely available are irresistible forces. A means to reconcile these two poles must and will be found. Insurance is one of the tools that can contribute but only if it is designed to do the job.