The most important characteristic of the insurance needed for owning or carrying firearms is the basic structure of who is protected and paid by the insurance. Voluntary insurance is always designed to protect the insurance buyer or owner first and pays third party victims only when necessary to protect the policy holder. Required or mandatory insurance is intended to protect the public and persons other than the policy holder, and should promptly pay insured persons.
Representative Carolyn Maloney (D-NY-12) has introduced a bill, HR-2546, to require insurance for firearm transfers again in the congress. The bill has been co-sponsored by representatives: Blumenauer (OR-3), Clark (MA-5), Grijalva (AZ-3), Lynch (MA-8), McGovern (MA-2), Rangel (NY-13), and Tsongas (MA-3). It is a requirement for liability insurance for sales of firearms. As introduced it does not specify the amount of insurance required or the parties to be protected by the insurance.
This blog has pointed out many times the limitations of the liability insurance model for protecting victims of gun violence; but many people easily see the parallels between the car insurance requirement and the need for gun insurance. Liability insurance, as implemented in various states for the protection of people injured by cars, is often modified by the provisions of a mandate to be in a form which, while called liability insurance, is really based on some other insurance system. These systems are typically called no-fault insurance or personal injury protection as well as being nominally called liability insurance. They pay benefits directly to victims.
One of the good models for gun insurance is found in the requirement for a personal injury protection endorsement to car insurance in Rep. Maloney’s own state, New York. It is codified in New York Regulation 68. This provides for persons not covered by their own insurance (such as most pedestrians) a requirement for no-fault benefits which are paid directly to first parties (injured persons).
Suggested New Text for Bill Continue reading
This is the second post in a series about workers’ compensation insurance as a model for mandating gun insurance. The series starts with Firearms and the History of Workers’ Compensation.
The two sides of the bargain
The Great Bargain of Workers’ Compensation is called that because employers gain immunity from lawsuits for negligence from their workers and the workers gain certainty that they will be compensated for work injuries by compulsory insurance purchased by the employers. As the first post in this series described; the system came out of an intense reform effort from many people determined to protect and benefit workers; but employers, especially the larger firms, also pressed hard for enactment of the system. The result was adoption of compulsory insurance in many states before 1920. Even in states where an employer could elect not to participate (still allowed in Texas) nearly all employers opted in to get protection from liability.
This is the first of a series of posts which are designed to show that workers’ compensation systems, insurance and laws are an excellent–the best that we have–model for dealing with gun violence victim compensation and for reducing that victimization.
A little over one hundred years ago, our country faced a crisis that was quite similar to the gun violence problem that we now face. Industrial and work related accidents were completely out of hand, producing deaths and injuries that reached almost every family. Looking back on my own family history, a great uncle on my fathers side was killed and my mothers grandfather lost an arm–both in railroad accidents of that era. It’s mostly forgotten today but it was a great issue at the beginning of the twentieth century.
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
It’s becoming clear that the underlying reason for insurance industry opposition to requiring insurance for guns is the latest move in a very old battle to keep the government out of regulating insurance and leaving the path clear for insurers to maximize their interests and profits. In a fascinating book from 1929 presenting both sides of the debate Edison L. Bowers, its editor from Ohio State University, wrote in an introduction:
No large group of persons stands as sponsors for compulsory automobile insurance in any of its forms, although an association has been formed to promote the compensation insurance idea. As already suggested, however, there is a strong undercurrent of public opinion to the effect that something needs to be done to curb the growing menace of the automobile, and that compulsory insurance of some sort will help in that direction. The opposition, on the other hand, is much better organized and considerably stronger. Both the United States Chamber of Commerce and the American Automobile Association have declared against compulsory insurance in its present contemplated form. The latter organization opposes it particularly on the ground that such insurance would not prevent accidents, which end is the basic issue in the problem.
The strongest opposition comes from a source least expected. The insurance companies have definitely declared against compulsory insurance. Their attitude has added new fuel to the controversy. It has raised the old issue of the “vested interests” versus the public. … the private interests present the argument that legislation should never invade the realm of private enterprise, that any change contrary to the welfare of private interests is un-American, socialistic, and perhaps unconstitutional.[i]
By the time compulsory insurance was being adopted in New York State in 1956 at least 85% of the motorists in that state had voluntary insurance with almost no regulation of terms and rates. The insurers were loth to allow a mandate which they were sure (and correctly so) would lead to regulation and especially regulation of rates. This history indicates that the insurance industry is no friend of the public but it will bend to the public will when it is finally expressed and then will serve the public.
[i] Edison L. Bowers, “Introductory Note,” in Selected Articles on Compulsory Automobile Insurance: Liability and Compensation for Personal Injury, ed. Edison L. Bowers (The H.W. Wilson Company, 1929), 16.
On Thursday May 16, 2013 the District of Columbia held a hearing on the B20-170, Firearm Insurance Amendment Act of 2013 their Gun Insurance Bill. The first panel consisted of Dan Gross, President of the Brady Campaign; Erin Collins from NAMIC; Tom Harvey, Gun Insurance Blog and Kris Hammond, Resident of DC.
The hearing was taped and the video is available here. Written testimony from Dan Gross, Kris Hammond and Chester A. McPherson is here. News coverage generally ignored the supporters of the bill. For example see the Washington Post Story.
After preliminary remarks by Committee Chair Vincent Orange and Councilmember Mary M.Cheh (the bill sponsor) the first to present was Dan Gross who gave a good presentation in support of the bill outlining the seriousness of gun violence in the US. He gave an example illustrating that current insurance does not apply even to many accidents, if it is available at all. He stated that “it is absolutely unfair to saddle innocent victims with all the costs.
Erin Collins gave a presentation of the industries opposition to mandating insurance for guns. It stated that this insurance was unnecessary and impractical and repeated that it couldn’t cover intentional acts.
Tom Harvey for this blog gave an oral version of the written statement below but added examples to counter the statement by MS Collins that insurance couldn’t cover intentional acts. Continue reading
The insurance industry through its trade group spokespersons has been very negative on the possibilities of dealing with the gun violence problem by means of requiring insurance. The legislative proposals made so far have all been very narrow calls for conventional liability insurance sometimes with high limits. The trade groups have been quick to jump on the limitations of that approach and on projected difficulties with implementation. The quotes in various new articles have been very hostile to gun (and actually all) insurance.
In a statement made to the Connecticut State Legislature on March 19, 2013 the Property Casualty Insurers Association of America (PCI) made a more carefully worded opposition to such insurance. This allows an analysis of the reasons for the reservations of the insurance industry on this matter.
PCI opposes this legislation because it will be ineffective in curbing gun violence and will create significant burdens for law abiding gun owners and insurers. As a general rule, PCI opposes mandating the purchase of liability insurance. We have found that mandatory insurance requirements are often ineffective and serve only to add enforcement and administrative costs for both government entities and insurers.
The comparison with motor vehicle insurance is relevant here in showing that this is a ridiculous statement. While it varies greatly from state to state, in many states motor vehicle insurance is mandatory, enforced and highly effective in compensating injured persons. In states where it is not effective, it is because insufficient insurance is mandated or enforced.
The bill in the District of Columbia Council, B20-170, requiring insurance for guns will have a hearing at 10AM on May 16, 2013. The text of the bill requires liability insurance of $250,000 for gun owners. It provides for willful acts.
(b) The insurance policy required under subsection (a) of this section shall specifically cover any damages resulting from negligent acts, or willful acts that are not undertaken in self-defense, involving the use of the insured firearm while it is owned by the policy holder.
The announcement of the hearing provides for written statements until May 30, 2013.