Insurance for Victims Not Shooters

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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.

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A Straightforward Recommendation for Gun Insurance

FIVE REASONS TO MANDATE GUN INSURANCE

To require additional individual responsibility such as locking up firearms

To provide victims with needed funds for medical and other costs

To make those causing the deaths and injuries pay, rather than the public through Medicaid or the victims through private health insurance

To supplement public regulatory oversight with private insurance company oversight

To encourage new technologies such as “safe guns” that would reduce accidents

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CAR INSURANCE AS AN ILLUSTRATION Continue reading

The Workers’ Compensation Bargain. A Model for Gun Insurance?

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.

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Cars v. Guns about Mandatory Insurance

Many people, when asked about the possibility of requiring insurance that would protect victims of gun violence, compare guns to automobiles; and, knowing that we require drivers to have insurance, think that it’s a reasonable thing to do with guns.  It is a reasonable thing; but there are both similarities and differences.

Gun proponents, who often view compulsory insurance as simply an interference with rights they consider to be absolute, tend to offer a number of relatively unimportant differences by asserting things such as  “car insurance isn’t required on private property or unless the car is being driven.”  This isn’t always true; but, more importantly, it has little to do with how to handle a reasonable requirement for gun insurance.

The big difference is the way that we treat responsibility about the two classes of possessions and the politics of that responsibility.  People are used to car owners being responsible for their cars and expressing that responsibility through liability and insurance.  Gun proponents have worked to deflect responsibility away from owners and suppliers of guns and onto gun users; and then from gun users onto victims who can be perceived as responsible for their own injuries when the gun user thinks, rightly or wrongly, that shooting is justified.

The purpose of this post is to point out the similarities and differences that have substantial consequences in the design of appropriate insurance.

Similarities between Cars and Guns

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Comments on a Blog Post about Mandating Gun Insurance

It’s hard to get thoughtful responses to the ideas published on this blog.  Most comments are from people who simply assert their, usually negative, conclusions.  When I get a response such as The Truth About Maryland’s recent post “Mandatory gun insurance: an interesting smart idea that won’t really work. A primer, from a finance and insurance geek,” I welcome the chance to look for new information or approaches to the problem of dealing with gun deaths and injuries.  Insurance is a tool and gun injuries are a problem that to be addressed by that tool require that it be specifically adapted to the problem.  For example, the parallels between automobiles and guns are striking because both are widely used instrumentalities that result in a substantial amount of death and injury; but this blog outlines differences in the best implementations of insurance.

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Amar Kaleka for Congress with Gun Insurance in Platform

Amar Kaleka is a candidate for Congress from Wisconsin running for the seat now occupied by Paul Ryan.  He is the son of one of the persons killed by a Neo Nazi white extremist at the Sikh Temple in Oak Creek Wisconsin on August 5, 2012.  He has gun safety as a key issue in his platform.  Of particular interest to this blog is the third point on the “American Peace Plan for Gun Responsibility.”

3. Mandatory accidental discharge insurance on all gun sales and ammo.  When there is an accidental discharge and someone is harmed or victimized by an irresponsible gun owner, the burden of fiscal responsibility is left in limbo.  Private insurance carriers have the ability to determine the gun buyer’s biography, health, and criminal record.  Insurance companies and the market would decide reasonable premiums based on the type of gun purchased, carrying in public, or what type of training or the expertise of the gun owner.  The Federal government does not have this ability.

 

The announcement was made on August 30, 2014 in Santa Monica, CA with Richard Martinez, father of 2014 Santa Barbara shooting victim Christopher Michaels-Martinez; and Patricia Maisch, survivor of the 2011 Tucson, Arizona shooting.  It was picked up by Insurance News Net.

Limiting the mandate to accidental discharge makes the coverage much more narrow than the insurance advocated by this blog, but it is in line with many plans introduced in several states.  The argument that any insurance will cause insurers to take an interest in gun owners level of responsibility is probably a reasonable start.  The actual number of cases that insurers would have to pay would be small enough that it would end up being a very affordable coverage and is probably already covered by most homeowners insurance.

The fact that mandatory (but not so easily voluntary) insurance can cover intentional and criminal acts is not recognized; but in light of the widespread disinformation spread by insurers, it can be handled more effectively in full legislative hearing process than in an election campaign.

The point that insurers can do evaluations that the Federal government cannot is a good one.  The “Top Down” system advocated by this blog is based on that idea with a method of guaranteeing insurance for all guns without general governmental gun registration.

Gun Insurance Blog salutes Amar Kaleka for his courage and foresight in placing gun insurance in his platform in a clear and open manner.

The Question of Pricing Mandatory Gun Insurance

In addition to policy arguments such as those against putting costs and responsibilities on the public or burdens on gun owners, the insurance industry has offered two major substantive arguments against mandating gun insurance.  The first, which is the claim that insurance does not and cannot cover, intentional or criminal arguments is simply false.  This has been extensively explored by this blog at the post entitled  “Gun Insurance for Willful, Intentional & Criminal Acts.”  The second argument is basically a “Chicken and Egg” objection.  They claim that insurers have no experience to price such insurance and that without ratings experience such insurance cannot be sold.  This post is to show the reasons that this objection is of greatly diminished importance in the case of mandatory gun insurance.

Why can’t insurers simply add up the losses that are occurring as they are reported by emergency rooms, as part of claims for various other kinds of insurance, media reports and government statistics and assign them different weights in an estimate?  The basic reason is that, with voluntary insurance, the people who will actually buy the insurance are not a representative sample of the risk exposed public.  Sometimes that works for the insurers advantage because people can buy insurance because they are more than typically responsible in many ways and produce fewer than average claims.  But those who know that they have an elevated risk can buy insurance for that reason as well. Continue reading

Mandatory Insurance for Armed Professions is Normal

We see armed people working around us on a daily basis.  Some of these private professionals are highly visible such as guards for banks and armored car services and some are less obvious to the eye such as private investigators or detectives.  In almost all states there are requirements for them to have licenses and in most states they must have insurance or bonds that function as insurance.  But there is tremendous variation in the requirements and in the definitions and terminology of the various roles.

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New Bill SB2646 for Gun Insurance in Illinois Covers Intentional

Illinois Majority Caucus Chairman Ira I. Silverstein has introduced a new bill (SB2656) in the Illinois General Assembly to require that gun owners have liability insurance.  This bill covers willful as well as accidental shootings by the owner or others.  It covers lost or stolen guns until they are reported.

This would be very helpful legislation if adopted as introduced and could form the basis of a more detailed and developed requirement to cover more victims.  Because it designates continued responsibility for unreported stolen guns it recognized the important of gun theft for supply to illegal gun possession.

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Voluntary Insurance and Strict Liability as Good First Steps

Much of this blog is about how insurance should be designed and how it would work if an ideal insurance mandate was in place.  Opponents of such a mandate point out real and imagined problems that would prevent such insurance from working.  When the possibilities are examined the problems turn out only to apply to particular models of insurance and can be avoided by designing the insurance for the particular nature of guns and gun violence.

But there are also transitional problems that could block adoption of an insurance mandate that would work well once it was in place.  The most important of these problems is the fact that gun insurance that would protect victims does not exist currently.  The insurance that is designed to protect gun owners from accidental or self-defense incidents is very narrow and is not adapted to the need to protect victims even to the extent that existing liability laws could allow the redress in the courts.

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