There are lots of posts, comments, OpEds and media articles about requiring liability insurance for guns since Newtown. In fact, you can find a dozen (or many more) less than 24 hours old by searching “gun insurance” on your favorite search engine. They tend to fall into three categories—advocating that we have it, denouncing it as an assault on gun rights or regretfully explaining the impossibility of making it work. All of these categories are based on conventional liability insurance mandated in various amounts up to about $1 Million. The purpose of the insurance advocates often seems to be to punish gun owners for the danger they give to society and is seen as a back handed way to ban guns by the gun advocates. I think insurance, if differently structured, can be a way to deal with the deaths and injuries associated with guns without unduly burdening people who want to own and use guns.
There are two major goals that are served by a good system of insurance here, first to provide compensation for persons injured and, secondly, to allow the costs of gun violence to fall on those who can do something about it. In addition to the deaths, approximately 75,000 persons per year are non-fatally injured by guns according to the CDC. All of them need medical care now, some need medical care for the extended future and some need economic support because they will not be able to work again. There are many other needs coming from the deaths and injuries, a person killed may leave dependants to care for as well as need care for themselves. As to the second goal, insurance companies in many contexts do a great amount of loss prevention either through the market place with their underwriting departments or by direct contact with the insured by loss prevention departments.
In order to achieve these goals gun insurance needs to be No-Fault to have the compensation reach further than to those who can prove negligence on the part of the insured person and to relieve the victim of having to prove that they didn’t have any contribution of fault in order to be compensated. It also has to reach the great number of situations where the gun has strayed by loss, theft or diversion from legal, presumably insured, hands to an illegal holder. A good example of No-Fault in a somewhat parallel situation is the operation of New York State’s No-Fault system as it applies to accidents where cars hit pedestrians. It covers pedestrians hit by stolen cars until the car owner drops the insurance. The problem is the car owner can drop the insurance.
I think the way to achieve these goals is to require No-Fault insurance that starts at the manufacturer or importer of firearms. That insurer would only be able to relinquish responsibility when another insurer, probably contracted by a buyer, takes over the responsibility. The responsibility would pass down the line to each new legal purchaser and in the event of loss or theft would remain with the last insurer. That way, there would always be an insurer in effect for each gun; and there would be an incentive for legal owners to prevent what is probably the most serious threat from legal guns– that they might turn into illegal guns. Insurers would put conditions into their insurance contracts to keep guns from being lost or stolen. Straw purchasers would have a hard time getting insurance and dealers would be prevented by their own insurers from selling to those without insurance. This insurance does not need to be expensive, calculations based on the total deaths and injuries, generous benefits and a realistic insurance company markup point an average premium of less than $60 per gun annually.
A major advantage of this top down system of insurance is that that the regulations only need to mandate insurance for those who introduce a gun into the system. Manufacturers and Importers could be required to have insurance with these provisions and subsequent owners need not be regulated by the government for this to work. Laws and regulations would be much easier to uphold if challenged by 2nd Amendment issues. Gun purchasers with deep privacy concerns would only have to reveal themselves to insurance sales organizations, which would compete for their trust. There would need to be information available to the government or injured persons only about connecting the specific weapon identified by serial number or, perhaps a bullet scan, to the insurer responsible at the time of the shooting.
There are many details and questions about this scheme, which need exploration. I am looking at them at a dedicated blog on the subject. I would welcome suggestions about this or any better way.
Crossposted on Gun Insurance Blog