Questions and Answers on Mandating Gun Insurance.

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.

Q: Does a requirement for gun insurance exist now in some places?

Gun insurance is not currently required in any US state for private owners.  Bills to mandate gun insurance have been introduced in many states but have not yet been adopted.  Germany and Portugal do require insurance to get a license to possess guns and in the US armed guards and private investigators usually have an insurance requirement as part of a license program.

Related: Mandatory Insurance for Armed Professions is Normal and Mandatory Gun Insurance in other countries

Q: What should be done on a federal level?

Because of the widespread problem of guns crossing state borders and then causing deaths and injuries, there should be a federal mandate that each state require such insurance, that the insurance once attached to a gun continue until replaced with other suitable insurance and that the insurance pay benefits in accordance with the system in effect in the state where the injury occurs.

Related: The Need for State Regulated Gun Insurance with a Federal Mandate and Federal Mandate for Top-Down Insurance

Q: What kind of insurance is needed to provide for all victims?

The nature of guns and their usage make two insurance characteristics critical. First the eligibility for benefits should not depend on the nature of the incident where the victim was killed or injured. Proof only that the needs come from injuries by gun should be sufficient. If the particular gun is not identifiable then there should be a pool financed by all insurers to provide benefits. The second characteristic is that we need to be certain that insurance is in place for a sufficient proportion of the guns that the pool for uninsured or unidentified guns does not need to be too large.

Related: How It Would Work

Q: How can we cover victims in all of the many circumstances?

No-fault insurance is in use for motor vehicles in some states and for workplace injuries in all states. While motor vehicle no-fault insurance pays most injured persons from their own insurance; that is not always the case. In cases where a victim–say a pedestrian–is not expected to have insurance, then a driver’s, a car owner’s or other insurance will usually pay. For gun insurance to be effective, it should be based on a no-fault model with the insurer responsible for a particular gun the primary payer.

Related: No-Fault concept as it would be for gun insurance

Q: How do we guarantee that insurance will be in place?

Insurance should be required for legal owners of guns. It should then continue in effect until it is taken over by a new owner of the gun. This only needs to be checked by the government one time when the gun is manufactured or is first sold. After that keeping up the insurance can be controlled by the existing insurers who will take contractual steps to insure renewal and prevent improper transfer.

Related: Top Down

Q: How should we do insurance for Carry Permit Holders.

Persons with carry permits already are registered with their states, so requiring insurance for them does not create a privacy problem. They present special dangers to the public that are more widespread than guns for defense in the home or for sporting uses. States can require insurance in that case with no more difficulty than for many other activities now insured.

Related: Enacting a Concealed Carry Insurance Mandate and Paths to Adopting Gun Insurance, General and Concealed Carry

Types of Insurance that Could Be Mandated

Q: How would liability insurance work to cover guns?

Liability insurance is probably the weakest way to provide for victims. There is no compensation unless the victim can prove negligence or worse on the part of the gun owner. If vicarious or even absolute liability is imposed by legislation on gun owners to broaden the cases covered, the uncertainty and delay in using the tort law system and courts to allocate benefits greatly undercuts the usefulness of the system. An important reason to have this insurance is to give certainty that medical needs will be met. That requires prompt benefits to pay medical expenses.

Related: A Progression of Kinds of Insurance for Guns and Voluntary Insurance and Strict Liability as Good First Steps

Q: What is liability insurance with direct payment to victims?

Because the gun owners who buy insurance often are involved in intentional and criminal acts in shooting situations, they may not be appropriate for receiving compensation for their legal liabilities. Compulsory insurance is typically designed to pay directly to the victims to avoid this problem. Current self-defense insurance as sold by the NRA and others never does this; so, in that case, if the gun owner breaks the law, the insurance does not pay and the victim does not benefit. Conventional motor vehicle insurance in most states works this way.

Related: Is Self-Defense Insurance Legal in California?

Q: What is no-fault insurance?

No fault insurance pays directly to victims on the basis of their losses that are caused by the insured article or activity. It does not consider negligence or fault on the part of the owner or user of the insured article. With cars if the victim has insurance that insurance is often the first payer so that most injured persons collect from their own insurance; but with guns it’s more appropriate to have the gun owner’s insurance pay first because most victims won’t have their own insurance. Worker’s compensation is inherently a no-fault system with the insurance and business owner’s insurance doing the paying. A no-fault system is essential for good gun insurance.

Related: How To Seriously Approach Gun Insurance That Protects Everyone

Existing Insurance as a Model for Gun Insurance

Q: How would NRA or other existing self-defense insurance work to protect victims?

The insurance sold by the NRA comes in two levels. The regular level does not cover intentional shootings even in self-defense. It covers accidents and perhaps the shooting of a person other than the intended target in a self-defense situation. It only applies when hunting or on a supervised range so it misses home accidents and excludes injury to family members. The self-defense extension is a good bit broader in covering the shooter in self-defense situations. Because both only pay for the shooters tort liability after negligence is proven they provide no protection to nearly all victims.

Related: NRA Liability Insurance vs. Complete No-Fault Insurance Costs and Self-Defense Gun Insurance

Q: How could homeowner’s and renter’s insurance be extended for guns?

Most homeowner’s or renter’s insurance pays for liability for gun accidents. There is usually a clause that excludes coverage of intentional acts such as self-defense. It usually excludes family members and requires that the victim prove negligence. It could easily be extended to cover many more victims with a clause establishing a no-fault mode with payment to victims regardless the intentions or other disqualifying actions on the part of the insurance owner. It would then provide protection similar to that received by a mortgage holder in cases such as arson by the homeowner. The primary drawback is the lack of a claims adjustment system for the no-fault mode.

Q: How could no-fault motor vehicle insurance work as a model?

Because it eliminates the need to find negligence by the insured party and directly pays to victims it’s a good model in most ways. Generally the first payer is the victim’s own insurance, which works for cars because most car crash victims have their own cars and car insurance. With guns, the victim wouldn’t usually have insurance so the insurance covering the shooter or the gun should be first to pay. Many states do that for pedestrians who are hit by cars with a provision usually called Personal Injury Protection (PIP). New York State’s PIP system would make a particularly good model as it applies to pedestrians. The benefit limits in NY are fairly low but Michigan gives a good model for that with unlimited medical expenses in catastrophic cases.

Q: How could worker’s compensation insurance work as a model?

Workers compensation insurance works to pay persons injured in nearly any way connected to employment. It is inherently a no-fault system. Intentional harm on the part of co-workers or employers is generally covered, but self-harm is not. There is usually a substantial state administrative system to supervise medical benefits which are often paid directly to medical providers. Lost wages are covered up to substantial levels and in some states there are survivor benefits. All of these characteristics made worker’s compensation the best model for gun insurance we have in wide use today.

Related: Workers’ Compensation Insurance and Gun Insurance

Q: How could persons injured by uninsured or unknown guns be covered?

Motor vehicle insurance systems often have a pool which pays claims where there is not otherwise an insurer to pay. This pool is usually funded by assessing insurers in proportion to the premiums earned. The main problem for guns with such as system is that the number of claims that have to be funded by the pool could easily be excessive. For that reason all other forms of insurance including Medicaid should pay before claims come from the pool. It is also important that in as many cases as possible the identity of the gun involved be established.

Related: Funding the Uninsured Gun Pool

Costs of Insurance to Protect Victims

Q: Why wouldn’t insurance with good benefits for victims be expensive?

There are two reasons it does not need to be costly. First, there are a huge number of guns in the United States to share the costs. Secondly, while guns are deadly and kill many victims, the number of persons who are non-fatally injured by them is much smaller than for other widely insured activities. Motor vehicle accidents and workplace injuries each produce multiple millions of injury claims for insurers each year, but guns only produce about 75,000 non-fatal injuries annually. Injuries and property damage such as smashed cars are the major expense for insurers, not fatalities.

Q: What is the approximate average cost of good gun insurance?

The estimated total medical cost in the US for fatal and non-fatal gun injuries is about $2.88 Billion annually. If we assume an equal amount for lost wages and other economic benefits and $50,000 per death for non-suicide death benefits then the total would be about $6 Billion per year insurance benefits. This also assumes that every case is covered. Applying the same loss radio as we experience for automobile liability insurance and dividing by the 300 million guns in the country gives a conservatively high average cost per gun of about $30 per year.

Related: Projected Costs for Gun Insurance are Low!

Q: Would that cost vary for different gun owners?

The premium calculated above is an average; it would vary with the level of risk. That level varies widely in different situations, with different gun owner histories, with different guns and probably many other factors. This variance has its own benefits, only the riskiest would face very high premiums, gun owners would have an increased awareness of the risks and they would have an incentive to reduce these risks.

Related:  The Question of Pricing Mandatory Gun Insurance and

The Role of Reinsurance in Mandated Gun Insurance

Q: How could gun insurance be made simple for ordinary responsible gun owners?

For people who only own a few long guns for sporting purposes or a handgun for defense in the home, the insurers are likely to want a simplified system for selling the insurance. It would be handled as an extension or rider on homeowner’s or renters insurance. There would probably be a short form to be submitted with the insurance application which lists the serial numbers and types of guns and commits the person buying the insurance to the insurer’s terms for proper continuance or transfer at the end of the policy period. The cost will be very low as the risks are greatly reduced in these situations.

Common Objections to Mandating Gun Insurance

Q: Insurance does not and cannot cover intentional and criminal acts.

This is simply false. There are many kinds of insurance that do just that but they pay directly to the victim and not to the wrongdoer. For example, in most states if you intentionally run someone down with your car, they can collect from your insurance. This was first established in Massachusetts in 1936 shortly after the first insurance mandate was passed into law. Unfortunately, some states allow insurers to write policy language that excludes this benefit. Having a mandate is a key point because it establishes that the purpose of the insurance is to protect victims. Another common example is the fact that homeowners insurance is generally written with a mortgage clause that pays the mortgage holder when a home owner commits arson on his own house. This was added in the 1930’s at the insistence of banks and lenders. It’s a good example of a situation where the equivalent of a mandate can come from a private third party.

Related: Gun Insurance for Willful, Intentional & Criminal Acts

Q: What are other examples of insurance that pay for criminal acts by insured persons?

Bonds to protect customers that cover professions such as locksmiths and contractors are a form of such insurance. Business liability insurance can protect the business from criminal acts of employees who typically are otherwise ‘also insured persons.’ It has to be written that way in the insurance contract, as it often is, showing the importance of requiring suitable language in policies. Worker’s compensation insurance protects employees from workplace attacks from co-employees as long as there is a work relation to the attack. It may also protect an employee from intentional acts of employers themselves, but again the wording of the mandate and policy can be very important.

Q: Illegal gun owners wouldn’t buy insurance, what should we do about that?

It’s certainly true that once the guns get into illegal hands, the person with those hands isn’t going to be taking out and paying for insurance. We need to find a way to rely on the fact that all of the guns start out as legal ones and require that insurance from the legal owner who last had control of the weapon remain responsible. We should have the attitude, “If it gets out on your watch, then you’re responsible for it.” This is what the system of Top-down insurance recommended here and explained below is about.

Q: Why should an owner who has done nothing wrong be responsible for what others do with a gun?

A gun is a very special object. It is designed to kill and injure. It is well known that guns are often taken and used without the permission of their owners. When a person chooses to have a gun, that person is choosing to expose others to a foreseeable danger beyond the dangers of ordinary life. That another person may take control of the gun and do the injury to the victim does not mean that the owner could not know that the presence of the gun makes injury a possible result. A policy that holds a gun owner responsible for the failure of precautions to maintain control of the gun and resulting in injury would contribute to public safety.

Related: Should Gun Owner’s Insurance Pay Victims After Gun Theft?

Q: How can insurance deter mass shooters and persons who lose control of themselves?

Dangerous persons with mental health or self-control problems won’t change their behavior because of insurance, but insurers if responsible for their actions will have an incentive to their possible actions into account. Buyers with records of such problems or with such people in their household will be a concern to insurers, who may charge them different rates or require special precautions to reduce the risks.

Q: Cars are only required to have insurance if they are used on the streets, why should mere possession of a gun trigger an insurance requirement? Many things such as cars only present a danger when they are used, risks from guns are there as long as there is a possibility they can be used.

Q: Is requiring gun insurance an unconstitutional burden on gun owners.

The Supreme Court has only spoken about individual gun rights in the Heller decision where it stated explicitly that regulation of many things around guns and in particular gun commerce is constitutional. The assumption by many gun proponents that guns cannot be the subject of reasonable, purposeful regulation is just made up by wishful thinking. Mandating insurance is a serious thing to do and should be done in a way that forwards its purposes of providing for victims and encouraging safe practices. Using it as a backdoor way to ban guns might cause constitutional problems and undercut its benefits.

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

Q: Is mandatory insurance for guns is like an unconstitutional poll tax? Requiring insurance isn’t a tax at all; it’s an expense for gun owners similar to the expense of requiring locks for guns around children. We have had a direct federal excise tax on guns and ammunition since 1919. The imposition of poll taxes was forbidden by the 24th amendment for federal elections, but there is no such amendment for guns. The extension to non-federal elections relies on the equal protection clause of the 14th amendment.

Related: Costs put on gun owners are not Poll Taxes

Q: Would undeserving victims milk gun insurance for fraudulent claims?

Motor vehicle and worker’s compensation systems in various states come under criticism for a perception of an excessive rate of fraudulent claims. Even if there are calls for tighter controls in a system of benefits, it is generally recognized that motor vehicle and worker’s compensation insurance is a good thing. The problems of fraud with gun injuries are likely to be much smaller those with the existing systems because guns wounds are pretty obvious and not like the subjectively diagnosed whiplash and back injuries that add substantial expense to current claims.

Q: What do insurance companies say about compelling gun insurance?

They work tirelessly to oppose all mandatory insurance. They have been doing this since 1929 for motor vehicles and, in spite of the fact that mandatory car is well established, are still opposing it today. It’s probably because of the fact that an insurance mandate gives regulators and legislators reason to regulate the terms and premium rates. They would much rather sell to only those who voluntarily buy insurance to protect themselves and who would probably be better risks. People and companies also resist being told what to do and only come to acceptance after experience shows the wisdom of a requirement. Trade group spokespersons with personal ideologies about gun rights may gravitate to the issue and one should take their pronouncements as not necessarily representing the positions of the more responsible people in the insurance industry.

Related: Insurance Industry Still Asleep, Hostile by Default to Gun Insurance, Looking at PCI Statement on Gun Insurance to Connecticut Legislature and Opposition to Mandatory Insurance in 1929

Top-Down Insurance

Q: What is a top-down insurance system?

Top-down designates an insurance system where the responsibility for continuing the insurance rests with the insurers themselves. Once insurance is in place, a term in the policy required by the insurance mandate specifies that the insurer only relinquishes responsibility for the specific gun if new similar insurance becomes effective. This term has two important and useful effects, first the insurance is guaranteed to be in effect even if the gun changes hands illegally or improperly by theft or otherwise and secondly it is not necessary for the government in mandating the insurance to register the guns or know the identity of the gun owners.

Related: Top Down

Q: How do injured persons file claims?

There has to be a way for a potential claimant to identify the insurer that is responsible. If the government sets up a database of insurers with the serial numbers and dates of responsibility for gun, the database will serve that purpose. It could also hold other identifiers for the particular gun such as coded scans of fired cartridges or projectiles. Another use would be to hold information from law enforcement agencies that have information that the particular gun is lost, stolen or crime involved. What it should not have is information that identifies the owner or location of the gun. That is between the gun owner and the insurer.

Q: How would it protect gun owner’s privacy?

The most important point is that the government does not have to track the gun owners. Their identity would be only available to the insurers. The government and law enforcement officers could, however, query the database as to whether a gun that comes to their attention has insurance coverage or is wanted by another law enforcement agency. The threat of legal sanctions if an uninsured gun is found would serve to enforce a requirement for insurance.

Related: Registration of guns and confirmation of insurance

Q: What if the government makes the insurance companies give up the names of their customers?

Many gun owners are likely to choose insurers on the basis of their trust in their ability to keep their information private. Most gun liability insurance other than as part of homeowner’s insurance is now sold by gun organizations who could continue to insure most guns. The insurers are not required to know any specifics about their customers. They may even choose to sell insurance to gun related businesses without knowing the identity of the eventual user. It only matters that the gun is provably insured as represented in the database.

Q: How would existing guns get into the system?

If the legislation adopting a gun insurance system requires that guns be in the system to be legal, then most owners of legal guns would comply in order to avoid the possibility of sanctions if their gun comes to the attention of law enforcement. If they do not, the danger from the guns is greatly reduced by the need to have the guns never checked by police, etc. People who hide guns away in anticipation of some future revolution or collapse of society will be hesitant to bring them out. The pool of guns in the hands of criminals and other outlaws will diminish over time with a reduction thefts and illegal sales.

Adopting a Gun Insurance Mandate

Q: How should we go about adopting a mandate for compulsory gun insurance?

The most effective way to adopt gun insurance in this country is to have a federal requirement that all guns be covered by insurance.  States could regulate the insurance companies, but the federal law could set minimum benefits.  It would also be helpful if the federal law provided that the level of benefits that must be paid were the benefits required by the state in which the injury occurred, if that is higher than the federal minimum. State by state adoption would also work but has several problems, the most important of which is interstate smuggling of illegal weapons.

Related: Federal Mandate for Top-Down Insurance, Paths to Adopting Gun Insurance, General and Concealed Carry and The Need for State Regulated Gun Insurance with a Federal Mandate

Q: What are some bills that have been introduced in various legislatures?

At least a dozen states have had bills introduced in their legislatures.  Some of these simply mandate without further definition a certain dollar limit for required liability insurance and some give definition to the situations covered and the benefits for victims.  A federal bill was introduced in 2013 by Carolyn Maloney.

Related: Suggestions for HR-1369 Firearm Risk Protection Act of 2013, Oregon SB-758 First State Bill for Effective Gun Insurance, DC Bill on Gun Insurance B20-170 Hearing and New Bill SB2646 for Gun Insurance in Illinois Covers Intentional

Benefits of Having Gun Insurance

Q: How would gun insurance do to improve medical care for victims?

Most victims of shooting do not have their own insurance. This may change with the Affordable Care Act but the record so far is that many get to the emergency room without insurance. While hospitals are required to give basic care to stabilize emergency victims, there is no legal requirement for follow-up care. No-fault insurance would give hospitals an incentive to provide all of the care needed with confidence that they would be paid for their efforts. Other victims may need extended care which is often limited under Medicaid.

Related: Article: “Medical bills can mount for shooting victims”

Q: What would insurers do for gun storage and safety?

Storage and safety is one of the most important areas for insurers to reduce their risks. They will especially be interested in keeping guns away from children. They will probably use a combination of education and asking questions of their customers. There should be much lower rates for gun owners who use especially safe practices such as keeping their guns in professional storage at ranges and gun clubs.

Q: What would insurers do to keep guns away from dangerous persons?

Insurers will be able to ask questions that would be resisted by government agencies. They could ask if other household members were special risks. They are likely to set the premiums to take into account the riskiest member of the household.

Q: What would insurers do for gun safety in other ways?

In other areas such as motor vehicles, employment and business liability, insurers have worked to get safer conditions in the entire society. They have set up organizations such as the Insurance Institute for Highway Safety and the Institute for Business & Home Safety. They have been a factor in the development of many safety codes. They are in a unique position to balance the interests of their customers and the public in such activities.

Q: What would insurers do to create a culture of safety around guns?

Having to maintain insurance will remind gun owners of the very serious responsibility that comes with a tool that can do so much harm. Knowing that serious breaches of such responsibility may through the provisions of their policies have to give up their weapons will make them be more careful. The educational work of insurers will help to overcome the tendency of gun owners, government officials and the media to ignore damage done by gun violence. As the barriers placed by insurers for guns getting into improper hands take place the three-way arms race between law enforcement, criminals and self-defense oriented individuals will recede. Once started, a movement in this direction can grow to an increasing effect.

Q: Could gun insurance cover suicide?

Ordinary life insurance generally covers suicide after two years. If life insurance is provided without payment for the insurance from the insured person, then it is possible to write policies without a waiting period. This would not only benefit survivors, insurers would take the possibility into account in their loss prevention activities. This could work to reduce the number of these cases.

Related: Should Gun Insurance Cover Suicide? and Firearm Suicide in DC

Q: Would insurers work to prevent guns straying?

This is one of the best effects of having an insurance system with continuing responsibility in place. Insurers would require persons they had insured to take great care that subsequent gun owners were legal and had taken out the proper replacement insurance. They would work to reduce not only the risk of incidents while the gun was in the care of the gun owner, but would insist on measures to reduce the chances that the guns is stolen or used improperly by another person.

Related: How Would Insurers Stop Straw Purchases?

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