The answer to the question of whether we need to mandate gun insurance at the federal or the state level is to have the mandate at the federal level and the regulation of the insurance at a state level. The special problems that guns have of illegally traveling across state lines to do their damage and of states varying so much in their willingness to regulate guns can be solved by this structure. The federal mandate should implement the top-down process for continuing insurer responsibility advocated by this blog. It should require that the insurance pay benefits to victims in accordance with the gun insurance requirement in the state where the shooting occurs.
One of the special difficulties that makes guns different than almost any other risk, is that move around from state to state so easily once they are in illegal hands. Much of the country has a relatively small problem with illegal guns and people there see no need to make access difficult. In other parts of the country, there is a major problem with death and injuries from illegal guns. No matter how carefully places like New York, Chicago and Washington, DC work to stop the transfer of firearms to dangerous people they cannot control the flood of weapons that come in from areas with more permissive policies. The process has been named the Iron Pipeline.
This blog believes that requiring insurance is a practical way to deal with the problem. Insurers that remain responsible for deaths and injuries from guns after they pass into illegal hands will set up conditions to prevent that passage. They will find ways to do this that are minimal inconveniences to legitimate gun owners. The question is how to get a requirement for such insurance into place in this environment. The states that sell the most guns are least likely to make such a mandate.
Insurance in this country is normally regulated by the states. The McCarran-Ferguson Act requires that if Congress wants to regulate insurance on a federal level, it must do so explicitly. The two major models for gun insurance, worker’s compensation and motor vehicles, are handled by the states. It’s likely that gun insurance will also be state based but will require a federal mandate to make certain it is in place. The certainty should come from a “top-down” requirement that makes a insurer retain responsibility for a particular gun until and unless responsibility is picked up by another insurer, regardless of any intervening events such as loss, theft or illegal sale.
The way to handle the need of some states for strong protection from the consequences of firearm injuries and of the desire of other states to put no expenses or limitation on the acquisition of firearms is to have the federal requirement specify that the benefits paid by the mandated insurance be set by the insurance requirement of the state in which the gun causes the injury. If an insurer does not want to be exposed to the more generous requirements of some states then that insurer will take steps in the terms of the insurance to insure that the gun does not travel to those states. For example, if Virginia has small benefits and New York State has generous benefits, then insurers will have an incentive to make sure that guns are not illegally sold to people who will take them to New York and sell them on the streets.
Once Congress is considering such a requirement the states will have an incentive to adopt a gun insurance requirement for guns sold in their own states in order to protect their citizens from illegal guns that come from outside their borders.