There are many systems of insurance with varying breadths of coverage. The liability insurance that is talked about in the discussion at the moment would only cover a small proportion of the deaths and injuries that are occurring. The systems described below run from something so narrow that provides compensation to only a miniscule proportion those hurt to ones that could be implemented to protect almost all injured persons. A general system of gun insurance create such a large market that we can and should develop the best approach, learning from the systems that now exist but not being tied to them.
Existing NRA Excess Liability Insurance
This insurance protects against damages to others by the individual using a firearm or certain other weapons. It has exclusions for injuries to family, employees, intentional acts, criminal acts etc. It only pays for amounts obligated as ‘damages’ and not due to contract. Obviously, in many cases it will not pay due to the injured person not being able to prove negligence on the part of the owner. Various kinds of state self-defense or contributory negligence laws would also stop any recovery from this insurance. It does not attach to any particular weapons but only to the individual who may not own the weapon involved.
Regular Liability Insurance
Homeowners insurance can apply to guns but there is an exception in most policies for ‘intended bodily harm’ which may apply if the insurance company questions the self-defense claim. Legislating Gun Insurance on the Liability model would still be limited by the need to prove negligence and by various state laws limiting liability. It would not protect from the major problem of guns that are lost or stolen.
Gun Insurance could be based on the model of No-Fault automobile insurance as it is applied to pedestrians. New York State’s regulation 68 is an example of a good system. It covers only medical expenses and some lost work up to $50,000 but does not cover direct economic damages. There is a very small death benefit. It does not prevent the injured person from suing for damages beyond the coverage. The main advantage is that compensation does not depend on negligence by the driver and the injured person can make a claim proving only that the vehicle was involved and the economic damages occurred. The main problem is that this kind of insurance does not cover stolen vehicles. It’s a good model for guns except for the very important lost and stolen gun problem. The limits on all automobile insurance are very small for today but NY has higher limits than many other states.
No-Fault Insurance with a Tail
The lost or stolen gun problem could be fixed by requiring insurance to have a ‘tail’ as it is called in the insurance industry. Tail insurance covers future claims for activitys in the past for a term of years or indefinitely. It is commonly sold in the medical and product liability fields as well as for construction companies. It is not standardized well and there are lots of problems with insurance that inadequately and opaquely leaves retired medical people and discontinued businesses with exposure. Because the insuring of guns on a wide scale will be a huge and fairly uniform business, it should be possible to develop insurance which will provide for those injured when lost or stolen guns turn up and do damage.
There is another possible system that would automatically handle the problem of lost or stolen guns. I will call it Top-Down insurance. The basic idea is that the Manufacturer or Importer of a gun is required to have this insurance in place. The insurer would be responsible for all claims until the insurance was taken over by another insurer. Presumably on sale of the weapon the insurer would require insurance to be in place before transferring the weapon. The insurance companies would develop terms which would minimize the risks in order to compete with the lowest prices. In other areas insurance companies have shown great ingenuity in developing systems that would sell, encourage the activity being insured and make money for the insurers. If the new insurance did not meet the original standards the old insurer would still be responsible. All of the enforcement would come from the contracts and rules established by the insurance companies which would compete for the business. There would need to be a system for injured persons to discover the relevant insurer from the serial number of the gun. That could be as simple as going to the manufacturer and following the chain of new insurers.