Enacting a Concealed Carry Insurance Mandate

While it would be ideal to have a gun insurance adopted at a single time as one well designed national mandate, it’s likely that political reality will force it to come into being in stages.  The logical place to start is for the more amenable states to require insurance for holders of permits to carry firearms in public.  If this can be extended to general coverage of guns in some of these states, the stage is set for a federal mandate for top-down insurance which extends into any state requiring insurance.  This in turn will encourage other states to have their own requirements in order not to have their citizens paying for insurance without their state receiving benefits for victims.

1. Concealed Carry as a Start and End in Itself

Mandating gun insurance for holders of permits to carry weapons in public is much simpler than mandating gun insurance in general.  Permit holders are already registered with state government agencies; there is no need for an additional registration system.  They are generally responsible people who have already shown their willingness to cooperate with reasonable regulations.  Insurers will find these people to be desirable customers.  Most measures to deal with gun violence have to deal with the flood of illegal weapons that come from states with weak regulation of gun trafficking.  But, states requiring insurance for permits can simply refuse to recognize permits from other states without insurance requirements or require proof of insurance in addition to such a permit.

Starting by requiring insurance for permit holders is not only easier to implement, but it will address quite a few additional dangers for guns carried in public that do not apply to guns kept for self-defense in the home:

  • Citizens who do not want to be exposed to the dangers of guns have no choice to avoid them.
  • People carrying guns often need to leave them in cars or other less protected places, encouraging theft and misuse.
  • The new “Stand Your Ground” laws often prevent innocent citizens injured in incidents from receiving compensation in shooting incidents.
  • Private property owners and businesses may be at legal risk from the guns brought by their visitors and customers.
  • The “bad guy” in a situation may respond with additional violence perhaps turning a robbery into a murder.

These additional dangers give the states an incentive to make this requirement.  Several states have instituted a provision for issuing these permits under great pressure from gun proponents or even in the case of Illinois from a federal court.  In other cases the state legislature has reluctantly expanded the permit system from a “may issue” system where local law enforcement officials may or may not approve the issuance of a permit based on the need in the particular case to a “shall issue” system where permits must be given to any person meeting defined requirements.  Those states which are uncomfortable with their system of issuing permits are likely to welcome required insurance as a way to provide a guarantee of responsibility on the part of permitees.

Enforcement of the insurance requirement can be made through the permitting process and because it is attached to the person holding the permit rather than directly to identified guns there is no limit to legally owned firearms.  Invalidation of the permit is a readily available way to enforce continuance.  The benefits can be defined by reference to a pre-existing system such as worker’s compensation in any state or no-fault motor vehicle insurance if available in that state.

Example of Possible Legislation for Carry Permit Insurance

 

AN ACT

Relating to requiring insurance for Concealed Carry Weapons Permits and establishing strict liability for injuries and death resulting from firearms used under such permits.

 

SECTION 1. As used in sections 2 to 5 of this Act:

(1) “Covered Firearm” means any firearm owned, controlled or used by a Covered Person.  Includes any otherwise included Firearm which is lost or stolen until the loss or theft is reported to a law enforcement agency in the area where the loss or theft occurred.[a]

(2)  “Covered Person” means any person holding a [Name of Permit].[b]

(3) “Evidence of Insurance” means a card issued by an insurer authorized to issue Firearm Permit Insurance which lists the name of the Covered Person and the dates of coverage and certifies the existence of Firearm Permit Insurance.

(4) “Firearm” has the meaning of any firearm or other weapon that is covered by [Name of Permit].[c]

(5)  “Firearm Permit Insurance” means insurance issued to comply with the requirements of this act by an insurer authorized to issue such insurance by the [State Insurance Regulatory Agency].

(6) “Issuing Agency” means [Name of state permit issuer]

(7) “Worker’s Compensation Equivalent Benefits” means all benefits that would be provided for a similar injury or death arising out of employment under [Workers Compensation Law].[d]

SECTION 2.  Worker’s Compensation Equivalent Benefits Requirement

(1) Firearm Permit Insurance must provide Worker’s Compensation Equivalent Benefits to any person injured in an incident involving a Covered Firearm.[e]

(2) A person injured after display, use or threatened use of a Covered Firearm is considered to be injured in an incident involving the Covered Firearm, regardless of the actual agency of injury.[f]

(3) A person injured in the act of a felony that started prior to the display, use or threatened use of the Covered Firearm may be denied Worker’s Compensation Equivalent Benefits by the insurer.[g]

(4) For the purposes of this section the average wage of any injured person whether or not actually employed or employable shall not be considered less than the average weekly wage of the state.[h]

(5) The minimum death benefit provided for a person killed in an incident involving a Covered Firearm is $100,000.[i]

(6) Nothing in this section will be construed to relieve the owner or user for liability incurred because of injury involving a Covered Firearm.[j]

SECTION 3. Liability Insurance Requirement

(1) Firearm Permit Insurance must provide liability coverage to each covered person in an amount of not less than $500,000.

(2) The liability insurance must cover liability for negligent injury caused by a Covered Firearm in any location.[k]

(3) The liability insurance must cover all liability incurred under section 5 of this act.

SECTION 4. Requirement and Proof of Insurance

(1) Any Covered Person must maintain Firearm Permit Insurance in place at any time a [Name of Permit] is in effect.

(2) A [Name of Permit] is immediately invalidated upon lapse of Firearm Permit Insurance due to expiration, failure to pay premiums, failure to comply with requirements of the insurer or other cause.

(3) An insurer issuing Firearm Permit Insurance must notify the Issuing Agency prior to lapse of Firearm Permit Insurance.  The insurer is responsible for claims under the insurance for incidents that occur prior to 30 days after that notice.[l]

(4) Failure to return the [Name of Permit] to the Issuing Agency within 10 days of lapse of Firearm Permit Insurance is grounds for refusal to reissue the permit for a period of 2 years.

(5) At any time a [Name of Permit] is required the Covered Person must have Evidence of Insurance available for immediate inspection.[m]

SECTION 5. Strict Liability for injuries involving Covered Firearms

(1) The owner or user of a Covered Firearm is liable without consideration of negligence or intent and regardless of any other law granting immunity for any injury involving the Covered Firearm at any location other than that person’s home or a place of business under that person’s control.[n]

(2) This section does not apply to any injury where the injured person is in the act of committing a felony that started prior to any display, use or threat of use of the Covered Firearm.


[a] An important reason for including stolen firearms is that a gun may be taken from the Covered Person or from a place or vehicle where it was left by the Covered Person and used by another.  This is one of the major risks of carrying firearms in public places.

[b] A law enforcement officer is not generally required to have a permit and so would not be covered.

[c] In most states this means that the insurance will not cover long guns.

[d] All states have worker’s compensation insurance systems.  Use of these systems will allow effective insurance to be defined without setting up a new system.  Due the much smaller number of injuries due to guns than to employment accidents this is efficient.  It is also desirable to use an existing system so that the practicality of the system is demonstrated by the preexisting experience.  Most state worker’s compensation systems have rules for intentional acts by co-workers or third parties and for self-inflicted injuries that are workable when applied to gun injuries.    Opportunities for fraud by injured persons are much more limited than in worker’s compensation or in no-fault motor vehicle insurance because guns rarely cause the kinds of soft tissue injury that leads to uncertainties in the diagnosis or required treatment.

[e] Incidents that are covered by the insurance are not limited to those occurring in places where the permit is required.  This is appropriate because persons having permits are more likely to have injuries produced by the permitted firearms in their homes and places of business.  They may have additional weapons and keep these weapons outside of locked storage in readiness for taking them into the community.

[f] An example of another agency is that the use or threatened use of a Covered Firearm may elicit return gunfire or other hostile behavior from the person against whom the use or threat was directed.  A person may also be injured in attempting to flee the area where the Covered Firearm was used.

[g] The limitation of the denial to felonious acts started prior to the use of the Covered Firearm is because after the incident starts, there may be a response with an unclear or controversial nature.  It insurer should not be allowed to use this uncertainty to deny coverage.

[h] Average weekly wage is defined in most state worker’s compensation systems.  It is important that there be compensation to persons who are not employed currently or are unemployable due to being children, having the duty to care for another person or being disabled prior to the shooting incident.

[i] This is higher than for motor vehicle insurance in most states, but should not be excessive for the states likely to initially adopt this insurance requirement.  In most cases the limits for motor vehicles were adopted in the past and would be higher if set today.

[j] Worker’s compensation insurance usually relieves employers of other liability.  It is not the intention of defining benefits as Worker’s Compensation Equivalent Benefits include this limitation on gun owners responsibility.

[k] The Strict Liability in Section 5 is limited to places outside the Covered Persons home or business.  Negligent liability should apply everywhere as it not does.

[l] This gives the issuing agency time to invalidate the permit and take other enforcement action.

[m] A law enforcement officer who stops a person with a Covered Firearm will be able to check the card in order to take enforcement action.

[n] This language is intended to override any “Stand Your Ground” or other immunity law.  The limitation to places other than a home or place of business is to limit the strict liability to places where the permit is required.

John Wasik Calls for Gun Insurance Again.

In a new article published Sept. 20, 2013 on the Forbes website and titled “Five Reasons Why Gun Insurance Can Survive Political Indifference”, he advocated for insurance as the most effective and practical solution to gun violence in more detail than ever before.  Wasik is a pioneer in pointing out the need for gun insurance starting well before the tragic incident at Sandy Hook.  His prior articles include:

February 15, 2011 in Reuters: “Why gun insurance should be mandatory

December 17, 2012:  “Newtown’s New Reality: Using Liability Insurance to Reduce Gun Deaths

December 29, 2012: “Gun Liability Insurance: Still a Viable Proposal

April 4, 2013: “Gun Insurance: An Economic Argument

His five reasons are:

1. Liability Coverage Addresses the Issue of Potential Future Harm Better than Any Gun-Control Legislation.

Wasik says the liability laws evaluate harm well and insurers will have an incentive to pressure gun owners for safety.  He does not mention no-fault principles which would be needed for effective general coverage.

2. Liability insurance should be required of all sellers and manufacturers.

He points out the importance of their responsibilities in selling and distributing guns.  He alludes to but does not explicitly state that their responsibility might continue to guns that were improperly sold and not insured by purchasers.  This chain of continuing responsibility is the core of this blogs advocacy for getting insurance in place to cover all gun injuries.

3. Liability Insurance is good business.

Wasik points out that the additional business should be welcomed by insurers and agents.  He does not point out that the insurance industry adamantly opposes any mandates for insurance in any area.  As this blog has often stated, this is because insurers think that mandates will bring regulation and especially regulation of prices.

4. Insurance is an accepted economic vehicle that’s been around for more than 200 years.

This is certainly true. Over that long time every new form of risk that has appeared has resulted in innovative solutions from the insurance industry.  Guns are the only important activity that has a substantial danger unaddressed by insurers.

5. The social costs are staggering and insurance can cover some of them.

Wasik mentions the medical costs which are only a part of what insurance should cover.  Worker’s Compensation and some Motor Vehicle insurance covers many economic damages—loss of work and support of dependents.  Even with these costs spreading them of the the huge number of guns to be covered would make insurance affordable.  The existence of an insurance requirement would reduce the number of incidents through it effects on safety and reduce the cost further.  It would also reduce the even greater costs of gun violence that are spread throughout society rather than concentrated on victims of shootings.  Costs such as reduction of property value, avoidance of activity through fear and the cost of protective measures.

John Wasik recognizes that dealing with guns is a difficult task for our society and will take a long time, but that insurance is one of the best tools we have.

Costs put on gun owners are not Poll Taxes

When a proposal for requiring insurance for guns is put into a blog discussion, many of the strong pro-gun advocates reacting to the post base their objection on rights as they assume they have them from the second amendment to the US Constitution. These assumptions can be very broad. And I see statements such as “what other rights do you have to pay for?” and “paying for gun insurance is like a Poll Tax.”

Well, I see us paying taxes on the means necessary to exercise a right all the time. Look at your phone bill, it’s full of taxes on a means to communicate. You have a right to travel, but pay taxes on cars and on air and rail tickets.

Poll taxes are really obnoxious, especially the way they were historically used, but they were not found to be unconstitutional until a specific amendment (The 24th Amendment to the US Constitution) was adopted. There is no similar amendment for gun rights. It’s interesting that rather heavy taxes for automatic weapons have never been found to be unconstitutional.

District of Columbia v. Heller is a very narrow decision in itself. It only overturns an extremely restrictive law that totally prohibits gun ownership. Later the court extended it to state laws in another case, McDonald v. Chicago. Since then lots of restrictions on gun use and ownership have been upheld by state courts. Whether the Supreme Court will strike a broader range of gun restrictions in the future is unknown. While lots has been written by legal scholars about the subject, the future path of this law will probably be determined by political considerations. Heller was supported by 5 justices with a strong dissent by 4 justices. It’s possible that it could be rolled back to the old view that any right to bear arms did not apply to individuals or it’s possible that it could be broadened.

As far as insurance is concerned, the system supported by this blog only requires regulations applied to the manufacturer of guns. Any requirement that the insurance be transferred to the subsequent owner, as would be needed to let the manufacturer’s insurer relinquish responsibility, would be a private contract.

Insurance Companies and Guns: What Would It Be Like?

Many people who can see the need to protect persons injured by guns and can see the parallels for responsibility to motor vehicles have a problem with involving insurance companies.  Writing recently in a diary about possible system for requiring insurance on guns, one of the most common concerns was a distrust or even hatred of insurers.  This is understandable because insurance companies often deny claims or access to insurance; and denial is likely to be harmful and very upsetting to the person denied.  In so many areas, insurance coverage is required in one way or another and is a barrier to people getting on with their lives.  Nevertheless, insurance is necessary and it matters greatly how it is implemented.

So the question is how would the insurance experience for gun owners work out?

The system I am envisioning in my writing requires insurance to be purchased by manufacturers or importers in such a way that, to relieve an insurer of responsibility, each successive owner must take over or provide new insurance.  If the gun is lost, stolen or diverted the responsibility stays with the current insurer.  This is critical because the primary danger lawful owners make to the public is they may lose control of a gun.  An important advantage of this system is that the government only has to regulate or even know about manufacturers, importers and insurers.  There is no need to register privately owned guns for this to work.

The legislation needed to mandate insurance would prescribe the types of incidents that would be covered and the requirements for payment.  It is very important that it be a no-fault system for two reasons, the situation in many shootings is so unclear that, even if it’s obvious there must be some kind of fault, proving it can be very difficult and protecting the privacy of gun owners is very important.  This gives insurers much less room is denying claims than in other kinds of insurance.  No-fault insurance for automobiles works well in many states, but the comparison of cars to guns is to the Personal Injury Protection (PIP) coverage that’s part of many state systems as it applies to pedestrians, who often don’t have their own insurance.  For examples, see Florida and New York.

For the purchasers of gun insurance, it’s likely that there would be substantial competition about rates.  Gun selling businesses would work hard to make good and economical carriers available to their customers.  Because the rates would probably vary significantly for customers in different situations, with different styles of storage and use and for different types of firearms, the insurers would be competing on convenience and privacy as well as price.

The big costs for automobile liability insurance claims are injuries and property damage rather than fatalities.  Because guns are involved in only about 2.5% as many injuries as motor vehicles, the average cost would be low.  Very generous benefits would have an average annual cost to insurers of less than $40 per gun.  Limits similar to a less generous plan such as Florida’s PIP would be less than one quarter of that.  These are averages; and particular situations would have higher or lower costs.  In particular, guns that have been in the possession of owners for substantial periods have a much smaller chance of turning up in shootings later.

Gun Insurance Would Not Be Expensive

                Getting an approximate estimate of the cost of Gun Insurance that would protect everyone is important even though the parameters of an insurance system have not been developed.  In many ways, the wide experience with automobile insurance will serve as a model for the system to come.  There are available sources for the numbers needed to make an estimate if one assumes a certain level of coverage and benefits.

The Insurance Information Institute publishes overall numbers for automobile insurance.  The particular items that interest us are for private passenger automobile insurance (excludes commercial):

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Comments flood Eugene Robinson Washington Post Opinion

Eugene Robinson has an article “Stop the gun madness” in the Washington Post opinion section.  It calls for regulation but does not mention regulation.  It’s of interest to this blog because of the flood of comments.  There are over 2000 comments in about 24 hours as of 4:45 EST on Jan 1, 2013 and it is getting several comments a minute.  A rough scan of the comments shows a mixture with more in favor of increased regulation.  I think this reflects Robinson’s usual readership but is different than the bulk of comments in other places which are typically hostle and opposed to all gun regulation.  It raises the question of whether the dialog will permenently change after Newtown.

Useful Post by Ben Achtenberg on treating Guns like Cars for Insurance.

Ben Achtenberg has an article in the Caring for Survivors of Torture blog titled “We Already Have a Way to Cut Gun Deaths.”  It makes the case for treating gun ownership with the same standards of responsibility as cars in detail and with strength.  He points out our willingness to accept driving tests, licensing, training and mandatory insurance for automobiles.  He shows that these are support the use and ownership of cars and that the “the insurance industry has a vested interest in developing regulations and price points that will not unduly discourage car ownership and use.”  He then rhetorically asks if there any chance of that happening and answers “In the United States of today, not a snowball’s chance in hell.” 

He then goes on to talk about how an insurance system would work on a conventional liability model.  He discusses licensing, regulation, market price differences based on risks and insurance prices being affected by safe practices and good records.  He supports insurance as a part of universal regulation. 

He does not discuss the other models of insurance other than to say that one reader suggested that a surety bond for paying injured parties could replace or supplement insurance.  This is a well thought out article and gives a valuable list of links for Related Reading.

 

Good Washington Post blog article on guns and insurance

Brad Plumer has an excellent article on ‘The economics of gun control.’  It discusses the overall cost to society and the ways that requiring regular liability insurance would help.  It’s the best survey article I’ve seen on the subject so far.  You should also look at the paper he points to by Duke’s Philip Cook and Georgetown’s Jens Ludwig. This paper analyzes the costs to society and gives a broad range of possibilities.

To get to a real solution for our society we’ll need to have insurance outside the box and address the two big no arguments–’it won’t cover criminals’ and ‘it’s unconstitutional.’  All of these problems are solvable and this kind of journalism is where to start.