Should Gun Insurance Cover Suicide?

If a good solid system of insurance that pays everyone injured by guns is adapted, an obvious question will be “should it cover suicide.” This is likely to be controversial because many people think that payments to survivors would encourage persons thinking of killing themselves. The issue has been worked out for regular life insurance by having “incontestability clauses” which allow such coverage two years after the policy goes into affect. The idea is that a person is unlikely to plan that far ahead which handles the insurers concerns about the hazard of selling insurance to one who knows that it will be soon be paying the benefit.

Social Security pays survivors benefits after the suicide of a parent or spouse who has been married for more than 9 months. In some cases life insurance paid for entirely by employers will pay in cases of suicide with out a waiting period. The requirement is that the insurance be given automatically by the employer and the employee not contribute to the cost. In that case the insurance may or may not have a suicide clause. It seems unlikely that a person will take a job to get insurance covering their planned death and it seems unlikely that a person will buy a gun to get insurance rather than commit suicide in some other way.

The cost of such insurance can be estimated based on the number of gun suicides today, it should be smaller if loss control provisions put in place by insurers are effective. The median limit for automobile personal injury insurance required in the US is $25,000. In various states requirements and death benefits when they are distinguished from general liability limits vary widely and are generally lower. Assuming that death benefits for suicide would be this amount and multiplying by the number of gun suicides from the CDC WISQARS system (19,392 in 2010) gives an approximate estimate of the cost to insurers. With a loss ratio of 50% (about the same as for car insurance) This gives a total increment to the premiums of gun insurance of of $968 million per year. Divided by the 270 million guns, such insurance would cost gun owners about $3.60 per gun annually. According to Gallup (2011) 47% of households own guns or about 56 million owners. Since multiple suicides by one owner’s guns would be rare, premiums would probably be assessed on a per owner rather than per gun basis for this component of the insurance and we should look at a per owner average premium of about $17 per year.

Unlike homicides, suicides are likely to be done by legal owners or at least people in the household of legal owners. They should not much of a cost to a pool to cover unknown firearms. Similarly, they should not make much of an increase in the portion of the premium paid to cover the possibility of a gun causing injury after it was lost or stolen.

Insurers can do a lot to reduce the probability that covered guns will be used in this way. They can base insurance rates on factors such as waiting periods, storage practices, mental health concerns of the gun owner or others in the household. Experience has shown that small changes in the availability of guns makes a difference in the probability they will be used for suicide. A gun that is kept in a vault at a gun range for a cheaper insurance cost would be much less of a risk.

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