Representative Carolyn Maloney along with 8 cosponsors has introduced a bill, H.R. 1369 – Firearm Risk Protection Act of 2013, to require that gun buyers and sellers have “qualified” liability insurance when they make a transaction or continue to own the gun. They would be fined up to $10,000 if they do not have and maintain the insurance. The text of the bill does not define “qualified” and gives no further details. I spoke on the phone with Rep. Maloney’s press contact and was told that the bill will be filled out with more detail in the future. In this diary, I will lay out the principles and elements that should be considered when the bill language is developed.
Gun insurance should serve to protect victims and promote safe storage and use of firearms, without being an excessive burden on gun owners (for a description of possible insurance see here). Unfortunately, conventional liability insurance as sold, for example by the NRA, is designed only to protect the gun owner not third party victims. Gun insurance, like any insurance that is mandated by government or required as a condition of doing business, should be designed to protect those injured by an incident. Moreover, it needs to protect the public by encouraging safe practices. Currently, gun insurance only protects the gun owner from theft and lawsuits.
The insurance should apply to intentional or criminal uses of the firearm
According to the Center for Disease Control, only about 3% of the deaths and a slightly higher percentage of the injuries due to firearms are accidents. In the vast majority of cases the shooter intended to kill or injure the victim, whether it was a justified homicide, a murder or an injury. Yet, householder’s insurance, which some shooters do have, usually only covers accidents. If victims of most shootings are to receive compensation, then the intent of the person who shoots them must not be a factor.
Insurers through their trade groups taken a position that “no insurance covers intentional acts.” For examples, see Insurance Information Institute(here) and National Association of Mutual Insurance Companies (here). This is baloney! There are plenty of counterexamples. Even though homeowners insurance and the excess liability gun insurance sold by the NRA work that way, there are many kinds of insurance which do cover these acts.
- In some states such as Massachusetts but not in Texas 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.
The point of these examples is that liability and other kinds of insurance can pay innocent third parties for intentional acts of by insured parties. Mandatory gun insurance should be designed like the examples above to protect the victims. Public policy, which is often said to prohibit such insurance, only prevents the malefactor from benefiting.
The insurance should follow the gun not the owner
In addition to protecting victims, another reason for having insurance is to encourage safe handling and storage of guns. A major part of the danger from guns is owners that do not protect their firearms from others who might use them. Insurers should be offering lower rates and other incentives for owners to lock up and keep control of guns.
In many or even most of the shootings that result in death or injury the shooter is not the legal owner of the gun. The owner may or may not be present, may or may not have given permission to use the gun and may or may not still have control of the gun. The victim still needs to be covered in all of these cases. Insurance that will protect victims should explicitly recognize this reality. For gun insurance to function properly, it needs to be restructured from the current model that assumes the gun is in the owner’s possession.
Insurance should continue to cover guns that are lost, stolen or diverted
It is extremely unclear whether the bulk of deaths and injuries come from previously responsible gun owners or from criminals who should not have a gun in the first place. Studies made about 20 years ago show a large percentage of incidents by persons with a criminal history, however that was at the time of a higher murder rate and an epidemic of crack cocaine use. Fortunately, homicide rates have come down. Since the reduction, we don’t know whether the percentage has changed so that more shooting are by apparently responsible persons. The laws limiting the tracking of guns by the government and the public health sponsored research on this subject make it hard to answer this question. But in any case, it important that victims of illegal guns be protected.
Clandestine gun factories directly selling illegal firearms are rare or nonexistent. All the the illegal guns started out as legal firearms and were somehow taken into improper hands. Most of the firearm criminal and regulatory laws are aimed at slowing this transition. Insurance can play a large role in that effort. If the insurer of a legal gun remains responsible when control of the gun is lost, there is a great incentive for keeping that control. (I have written on this approach here) Insurers will have loss prevention activities for this purpose. The best way to accomplish this is to allow an insurer to relinquish responsibility for a certain weapon only if another insurer takes it up.
The insurance should be No-Fault
Proving negligence on the part of a shooter is difficult in many or most shootings. The circumstances may not be clear. The victim may need medical care right away not after a prolonged court battle.
One of the most important reasons for No-Fault motor vehicle insurance is so that people needing medical care can get it right away. Even though emergency rooms are required to give certain care at the time of crisis regardless of ability to pay, without follow-up the prognosis for a person with a serious gunshot wound is not good. Hospitals need to know that they will be paid for persons brought to them after shootings. While the number of injuries from guns is much less than from motor vehicles, many of them are quite serious. Approximately one half of the cost of gunshot injuries is now paid by Medicaid.
No-Fault insurance for motor vehicles often has a person collect first from their own insurance. This is not necessary and in many cases the insurance is No-Fault in relation to negligence but the injured party collects from the insured vehicle’s insurer. In most states there is a hierarchy of payers with the first available source on the list taking the claim. A good order for gun insurance is would be:
- 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 another gun owned by the owner of an uninsured gun causing the injury.
- 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.
- A pool funded by insurers in proportion to premiums earned for payment in cases of unknown or uninsured guns.
There should be a means to find the insurer of a gun
Insurance companies should be required to submit the serial numbers of guns that insure to a central database kept by a single authority. In that way an injured person can inquire to find out with which insurer to make a claim. If insurance is done in such a way that the only way an insurer can relinquish responsibility is to have a new insurer, then the last insurer or the one on the date of the incident must be responsible. If there is no insurer in the data base, there should be provisions to find an other possible payer in accordance with the hierarchy above. For example, a gun owner or shooter involved in an incident should be required to provide insurance information on other guns owned if that is needed to make a claim. The database does not need to identify the owner of the gun but only the insurer and so is not a form of gun registration.
Can gun insurance be designed that follows all of these principles?
Absolutely. We have examples of insurance in use today that does all of these things. The best example at hand is No-Fault motor vehicle in New York State or Michigan as it applies to pedestrians. They don’t have their own insurance but, even if they are injured by an unknown hit and run driver, they are compensated. In Michigan the benefits can, if necessary, provide lifetime medical care with no fixed cost limit. Workers’ Compensation Insurance as it is provided in most states could be also adapted to this need.
This bill is waiting for definition of the insurance required. It is very important that this insurance be done in accordance with the principles above. There are many ways the insurance can work, but the principles define the necessities for a system that would be effective in protecting the victims and the public.
This bill, H.R. 1369, has been referred to the House Committee on the Judiciary. The cosponsors are:
- Keith Ellison MN-5
- Eleanor Holmes Norton DC
- Michael E. Capuano MA-7 20
- James P. Moran VA-8
- Bobby Rush IL-1
- Niki Tsongas MA-3
- Stephen F. Lynch MA-8
- Earl Blumenaur OR-3