Questions and Answers on Mandating Gun Insurance.

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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.

Related: Insurance-Good for Victims, Safety and Gun Owners

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.

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CCW Permit + Stand Your Ground = Insurance Need

Many states have adopted stand your ground laws that protect shooters in public spaces that accidently(with or without negligence) either unintended bystanders or innocent persons who are wrongly believed to be a threat.  This is the most uncontroversial situation where insurance should be required.  These innocent people need to be protected and many of them are not insured themselves.

As this blog has argued people who have permits to carry weapons into streets and outside the home.  These people are more likely to confront real and perceived threats with an audience of bystanders.  They represent an additional risk over those who only have guns for protection in their homes.  These risks and the relative ease of insuring against it are described in another post “Enacting a Concealed Carry Insurance Mandate

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Projected Costs for Gun Insurance are Low!

People who are opposed to gun insurance will often make arguments that the cost will be prohibitive.  They make guesses that it would cost typical gun owners thousands of dollars and work as a backdoor way to prohibit guns.  This is not actually what would happen if insurance was required.  We have enough information to make estimates that would put a ceiling on the average cost and it turns out to be quite reasonable.  Of course, insurers would take particular situations into account and dangerous owners and situations would pay more than average, perhaps much more; but, that’s realistic and can be handled by the owners taking measures to reduce the dangers.

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Gun Insurance for Willful, Intentional & Criminal Acts.

One of the things that opponents of gun insurance or insurance trade representatives often say is that insurance cannot cover intentional or criminal acts.  This is simply false.

There are many kinds of insurance that cover such acts.  The key is that the insurance pays to the victim and not the wrongdoer.  It doesn’t have to matter if the deed is done by the purchaser of the insurance or another insured person.  It is important the the policy be written to make this clear; policies that exist at least partially for the benefit of third parties typically work that way.  Insurance that is compelled by law for an activity often applies in these cases even if it’s not spelled out in the policy, but courts differ on this point and an explicit requirement in the legislation and in policy language is a good idea.

Insurance textbooks teach that whether an act is accidental or willful is determined from the viewpoint of the insured.  Mandatory insurance should treat a victim as an also insured party. This is necessary because the purpose of many kinds of insurance is to protect the insured against the willful acts of outsiders. An example would be a day care center that is negligent in screening visitors who might commit an abuse against a child.  From that viewpoint, a act that is deliberate on the part of the abuser is an accident to the victim.

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Enacting a Concealed Carry Insurance Mandate

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.

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The Need for State Regulated Gun Insurance with a Federal Mandate.

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.

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Registration of guns and confirmation of insurance

In order to have a system of insurance the covers the dangers of having guns in our society, it is necessary to have a way to be sure that insurance exists that covers each victimization. The simplest system is to mandate the insurance and have the government check that it is in place. This requires that the government be aware of the identity of the gun owners in order to enforce the mandate. This means registration of guns or gun owners. The political objection to this is very great. If it is necessary to override this objection or wait for it to dissipate, then implementation of insurance for gun victims will be greatly delayed.

The Objection To Registration

Many people who are concerned about gun safety are not aware of the depth of the fear of government held by some of the gun rights defenders. There are a considerable number who have deep and broad paranoia which has been focused on this issue with severe personal mental health issues but an even larger number are simply trained to express this distrust by gun organizations, the media and those who want even more guns in circulation. Even more are aware that some form of tracking guns is essential for application of many measures to control or limit their circulation. They may fight registration of firearms as a way to prevent control of firearms.

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John Wasik Calls for Gun Insurance Again.

In a new article published Sept. 20, 2013 on the Forbes website and titled “Five Reasons Why Gun Insurance Can Survive Political Indifference”, he advocated for insurance as the most effective and practical solution to gun violence in more detail than ever before.  Wasik is a pioneer in pointing out the need for gun insurance starting well before the tragic incident at Sandy Hook.  His prior articles include:

February 15, 2011 in Reuters: “Why gun insurance should be mandatory

December 17, 2012:  “Newtown’s New Reality: Using Liability Insurance to Reduce Gun Deaths

December 29, 2012: “Gun Liability Insurance: Still a Viable Proposal

April 4, 2013: “Gun Insurance: An Economic Argument

His five reasons are:

1. Liability Coverage Addresses the Issue of Potential Future Harm Better than Any Gun-Control Legislation.

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Paths to Adopting Gun Insurance, General and Concealed Carry

While it would be best to adopt gun insurance in the United States by national legislation that puts into place a full blown no-fault plan with the “Top-Down” provisions to guarantee that it covers all of the millions of guns in the country, it is not necessary to wait until that is politically feasible to make progress in protecting victims.  There are several paths where an important part of this protection can be implemented both for it’s own value and to demonstrate the practicality of more complete plans.

The first and the one that already in the public eye is to adopt compulsory liability insurance for gun owners who are registered in particular states.  This is the plan that is being offered in state legislatures.  It would apply to a fairly small subset of the injuries and killings because it has no way to be in effect for illegal guns.  But, as the proportion of gun injuries from legally possessed guns is going up due to a downward trend of crime in general and a greatly increased spread of legal guns, it would have a substantial value.  It may very will be accomplished in some places in the next few years.  This is the type of adoption that is seen by most writers who suggest insurance in the mass media.

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Compulsory Firearm Insurance for Concealed Carry

Concealed carry permits provide a situation where gun insurance is needed that is much simpler than guns in general.  Taking the guns out into the community provides an additional reason to provide guaranteed financial responsibility and many of the problems that have to be overcome to design good insurance are mitigated.  Some of the reasons that required insurance would be easier to implement are:

  • Most permit holders are generally responsible people and many have purchased or would purchase liability insurance to give legal protection to the insurance owner.  The insurance that will be recommended here is much broader than currently available liability insurance which is designed to protect victims, it will also provide better protection to the permit holder.
  • Permit holders are already registered with government entities.  Enforcement of this insurance requirement will not require a new registration system.
  • The problem that “criminals won’t buy insurance” is not applicable as they won’t have permits.
  • Insurers are likely to be more willing to provide the required insurance to this group.
  • The Supreme Court of the United States has declared that there is Constitutional protection for having self defense guns in the home; but it has not done so for guns in other places.

There are also good reasons over and above the reasons for guns in general to require this insurance for guns being carried in the community: Continue reading