Should gun owners be required to carry liability insurance?

In My Humble Opinion
21

Thanks for engaging in the discussion.

You suggested that insurance companies would exclude coverage for the things (murders) that people most want the insurance to pay for. I am noting that insurance companies don’t always get to choose what they cover because they are subject to relevant insurance law. If the relevant insurance law required them to cover murders and intentional acts by subsequent users, the policies would do so and they would be priced accordingly.

Insurance companies do so imperfectly now but they try. When their results are imperfect, they spread the risk among all the people who engage in the behavior but who can’t be differentiated. What you are essentially saying, in the guns example, is that insurance companies can’t differentiate whose guns pose a risk and whose don’t. Neither can the rest of society, which calls into question the very idea of allowing people to have guns so they can be the “good guy with a gun.”

That’s up to the insurance company to figure out. If they can’t do it, then they charge everyone the same. But the first one who can give a discount to safer gun owners without attracting the more dangerous ones will start to attract the most profitable business and leave the remaining more dangerous gun owners to other insurance companies, who then have to charge higher rates. The market should work itself out over time. Again, this is a free-market solution to the problem of guns. Conservatives love that.

Not unless you agreed to that in your policy. Maybe if you wanted a cheaper rate, you’d agree to it. Most people probably wouldn’t. I can’t imagine that most insurance companies would do so. Perhaps they would accept a receipt for gun safe installation as proof. I don’t know and I don’t care how they do it.

I have a liability-only policy with a multi-car discount that costs me more than it did when I had only one car. Why isn’t it cheaper? It only covers the same amount of driving by one driver - me. It’s more expensive because it covers a second car. Buying more cars doesn’t save you on insurance; it costs you more. Buying more guns should cost gun owners more too because their guns cause externalities.

Please see both my proposal to cover intentional acts and the law review article I posted about how many insurance policies cover intentional acts. If the insurance laws require covering intentional acts, the policies will do so.

The insurance company takes the risk that people lie to them. If they can’t differentiate between risks based on what people tell them, they won’t offer discounts based on what people tell them. It’s up to insurance companies to figure out.

I have nowhere proposed gun registration. Under my proposal, a person who buys a gun also has to buy an insurance policy that covers all the risks that the gun creates at the time of purchase. If the insurance company is strictly liable for a gun’s risk (rather than the risk being imposed on the owner with the insurance company merely insuring that risk), policies could even be anonymous. I’d imagine that insurance companies would charge much more for anonymous policies though. There are workability issues that make gun insurance an imperfect solution. Every solution we propose to every problem is imperfect. The question should be whether we are better off with the proposed solution compared to alternatives. I propose to hold people legally accountable for something they are buying and will own, not anything they don’t own. In doing so, it will discourage people from engaging in a risky activity when the social costs of doing so are higher than any benefit they perceive from the activity.

Also, the proposal would affect guns that people are buying or that they own. I’m not sure where you get the idea that this has anything to do with coverage for things they don’t own.

Here is your proposed alternative. Liability insurance already exists and yet we have 14,000 gun homicides per year. Your proposal is literally to do nothing. I consider that proposal inadequate. I would even say it’s unworkable. (1) Voluntary insurance is unworkable because people are terrible at estimating the risks of their behavior. (2) Even if people could estimate their risks, the poor and judgment-proof (like presumably Florida’s 18-year-old school shooter) can rationally choose to bear those risks without getting insurance because they have nothing to lose if they get sued. That leaves victims of gun violence with no recourse. (3) Today’s liability-only insurance effectively ignores the risk that any gun can be stolen and used in a crime. My insurance proposal internalizes that risk between the gun buyer and the insurance company and means that people won’t buy more guns than they consider worth having, minimizing this risk.

22

I’m staying out of all gun threads for at least 24 hours. A coworker and friend was just found murdered in his car. He was on-duty patrolling a parking lot over on Columbia Way in Vancouver sometime during the late night/early morning when it happened. I’ll get back to this topic after I cool down.

23

I am talking about liability if the gun is stolen and used in a crime. AFAICT the owner is not liable if his car is stolen, and gets into an accident.

Cite.

If someone breaks into my garage, steals my car, and deliberately runs someone over (or drives to a liquor store and robs it), I am not liable and I don’t need insurance for that. If someone breaks into my house, steals my gun, and deliberately shoots someone (or robs a liquor store), why should I be liable?

But according to your post, cars kill as many people as guns, and we don’t hold car owners liable if someone steals their car. Why is the same number of deaths enough in the one case, but not the other?

Regards,
Shodan

24

What peril is being covered by this insurance product? Have you compared to how current products work? Who would receive the payout? What would the penalty be for not having the product? What would be the enforcement mechanism? Should people of little means receive a subsidy?

25

I think it can be legally required. I’m not sure it should be for any gun. It is one of the things that can help differentiate a class of guns that we often ambiguously call ‘assault rifles’, guns which due to a rate of fire and other issues make them more dangerous and a general public hazard than simple handguns, rifles, and shotguns. The ownership of these more dangerous weapons should have specific requirements associated with them, but I’m not sure liability insurance should be one of them, though I don’t see a legal problem with such a requirement, and it’s probably a good idea in practical terms, just not quite a solution to the gun problems we have.

26

Czarcasm, I’m sorry to hear about your loss.

(1) I don’t want to focus on car insurance and I hope I didn’t derail the thread by bringing it up. I just thought it was a useful analogy. We aren’t really talking about car insurance.
(2) In some states, you can be held liable if someone steals your car and injures someone else with it if your negligence contributed to the danger. For example, you could be liable if you made the car easy to steal by leaving it running outside the liquor store. Accordingly, don’t think its entirely novel that someone might be held responsible for misuse by others of their stolen property.
(3) We have a bigger problem with deaths due to gun violence than deaths due to stolen cars. I’m more interested in finding solutions to gun violence than stolen cars. If the same solution would work to the same degree for car deaths, maybe I’d be all for it but it’s outside the scope of this discussion.
(4) If you didn’t buy the gun and have it in your house, it wouldn’t have been stolen and it wouldn’t have been used to murder the store clerk or whatever. The risk of my owning a gun is greater than zero to other people. Why should I be able to impose that cost on them when there is a simple way to make me bear the financial cost myself? Where’s my personal accountability for undertaking such a dangerous activity as owning and storing a gun? If owning a gun is not actually dangerous to other people, it shouldn’t really cost me anything to insure and insurance should be so cheap that no one should care how much it costs.

Of course, I think in real life, the insurance cost would be meaningful. What is the mean amount of injury inflicted by a gun each year?

There are roughly 300 million guns in the United States. Those guns collectively cause perhaps $100 billion to $229 billion in gun costs each year (cite for damages: Can the U.S. afford the massive cost of gun violence? - CBS News). If we used the low-end estimate, each gun, on average, would causes about $333 in damages each year and would cost that much to insure for one year. And if a new gun buyer had to pay to insure that gun for its entire life upfront, employing an 8% discount rate on future damages and a 100 year average life of a gun, it would cost just under $4500 to buy the policy for the average gun. Most people who are buying guns just don’t want them that badly.

Imposing liability on people when guns they bought are misused by others also gives both the people and the insurance company incentives to minimize the damages the guns might cause. If your insurance company would drop the price of your gun insurance policy from $4500 to $3500 if you bought a good safe (or could prove you already owned one), then you would probably buy a good safe and it might not get stolen at all. Maybe they would give even better incentives for smart guns that are less likely to be misused by anyone other than their owner. Maybe you would take a gun safety course if it were free. If you were convicted of domestic violence or drinking and driving and your insurance company offered to buy your guns from you for $7500 (just so they could void the policy), you might take them up on that. If they learned that they had mispriced the risk and each policy was costing them more than they had charged for it, they might give their customers incentives, like a $2000 rebate, to sell their guns to anyone else who will get a replacement insurance policy on it. The price of guns would reflect their harm to society.

27

I think that the problem we run into when this sort of thing is discussed is: what do you mean by liability insurance? Typically, liability insurance would not cover intentional torts or criminal acts. (I believe that some states even prohibit insurance from covering criminal acts on a public policy basis). Additionally, someone is generally not liable (and thus need not be insured) for injury caused by a third party who has stolen the property. Those two exclusions are going to cover most of the risks posed by firearms.

If the purpose of the obligation is to provide compensation for injury, then it’s not going to help many people. If the purpose is to increase the cost of gun ownership, I think that an standard liability policy would be pretty cheap.

So I think we need more on the type of insurance that you’re proposing.

28

When I was in my 20s my car was stolen and was used in a hit and run. My insurance company paid out the claim. It was my car, it was the car that was insured, not the driver or me.

My insurance did not go up - I was not at fault. The risk was baked into the rates I was paying living in the neighborhood I was living in (not a great one), driving the car I was driving (which turned out to be a model known for its simplicity to hotwire).

(They also clipped the engine hose and cracked the block).

29

Under my proposal, people who had damages caused by a gun could sue to recoup them. I discuss above how current insurance products work and why they are inadequate. I’d propose that the penalty for owning a gun that has not been insured should be something like a felony conviction, jail for up to a year, a fine up to twice the approximate cost of gun insurance per gun (so perhaps $10,000), forfeiture of the gun(s), and forfeiture of your right to own a gun going forward. The latter would probably happen by operation of law if it were considered a felony.

As for enforcement, gun dealers wouldn’t be allowed to sell any guns unless the gun was already insured for the duration of its life. Insurers would submit lists of insured guns to the authorities (state or federal). That list could be anonymous. As I noted above, it’s even possible that the insurers could offer insurance that didn’t rely on knowing the identity of the owner - they would have to be strictly liable for any injury the gun caused. The police would enforce the law for existing guns and there is no question this would be spotty but when they came across guns, they could check the serial numbers and cross reference the list of insured guns.

Whether to give people of little means a subsidy is an interesting question. I’m not sure that we’d want to subsidize gun ownership. If they add safety to the world, gun ownership insurance should be free and there should be no need to subsidize. If gun ownership adds danger to the world, we don’t want to encourage it.

30

I’m sorry I didn’t respond to this sooner. We are talking about an imaginary law, so what it applies to is also imaginary. I would propose that the law not be limited to acts where the gun owner is negligent. If the gun is used to shoot someone, even non-negligently, the insurance company could be liable for that. One could argue that the insurance company should not be liable if the gun is used defensively in cases where lethal force is legal, but I’m not making that argument. I suspect this is a tiny percentage of cases anyway.

You are generally correct that intentional torts insurance doesn’t ordinarily cover intentional violent acts by the insured. But, again, we’re making up the law and we can make it say what we want. I would make sure that insurance did cover these acts because this is a major component of the damage that guns cause. The policy solution to the concern that we would be protecting people from the consequences of their own intentional acts is that we can also allow the insurance company to make a claim for damages against any person that intentionally or (grossly) negligently caused harm with a covered gun. You could also exclude coverage for punitive damages against the tortfeasor. Then, the exact same incentives exist as in today’s world to minimize the risk of harm to others.

Leave it to the insurance company to figure out which guns are risky and which aren’t. If “assault rifles” aren’t more dangerous than other guns, they won’t cost more to insure. Competition and free markets should price this risk adequately.

31

Charging higher car insurance rates by zip code is done, and it is often accused of being de facto racial discrimination. This would have the same issues, though most people don’t get too worked up over the car issue (or more likely don’t know about it).

What if your intended use changes?

Back of the envelope calculation, don’t cite it for actual purposes. According to 538 (infographic here, main landing page hereif you don’t want to go directly there)
~33,599 gun deaths
21,058 suicides, so excluded
546+269 accident+undetermined, some of which might be suicides
11,726 homicides

They unfortunately don’t give numbers, but it looks like mass shooting+terrorism+police involved is 1062 (I did an area count in a photo editor).
Ok, 10,664 that are potentially unjustified. Getting to the causes are difficult, but it appears that a large chunk are gang related. Most of these are therefore already prohibited persons* due to criminal history or age, and therefore unlikely to get insurance. If we even assume that only half of these don’t fall in that category, that means that something like 0.001 percent of guns are used in an

Of course none of that accounts for injuries that don’t end in fatalities, that is correct.

*e.g. 75% of Boston shooters in 1996 had a criminal history

Insurance is paid regularly, a bond is a one time thing. Which is it?

In the very least, it shouldn’t be around to generate revenue in the black or “punish” gun owners. Though like the Seattle one it doesn’t seem to be honest.

Cars do not require insurance. They only need insurance to be on public roads (and NH doesn’t require it at all). I supposed it’s analogous to CCW vs. keeping a gun at home. There is already insurance for the former, which is voluntary. It might work better if you **convince **people that the insurance is a good idea, then people who are victims due to a gun owner’s negligence/their families have a better potential to actually get money from a civil suit. NRA has a carry insurance, though I hear some private ones are better. Make sure to let people know these programs exist.

On preview, so it is a bond? And if the seller must get it, it transfers with the weapon? So is it a tax? Those aren’t unheard of, guns, ammo, and archery purchases go toward conservation. From your post, it sounds like you have an earnest interest in this and no big agenda, but other people seem to have a clear interest in pushing prohibition through similar means.

32

Not related to this thread: even if at fault sometimes your insurance doesn’t go up. But in those cases, and I’ll bet in yours, it goes on your record, so if you have another incident, they can spike your rates or drop you as a customer related to the first claim. I had two thefts, completely unrelated (different states), and was dropped from my personal property insurance as a result.

33

Let’s focus on this one. Since most deaths by firearms are suicide, if a person commits suicide, who receives damages? If it’s the estate, does that create a moral hazard with suicide essentially rewarding that action?

If a shopkeeper thwarts a robbery by shooting an attacker but does not kill the attacker, can the robber recover damages?

34

Insurance already encounters suicide - it’s totally solved.

Shop keepers operate under existing law. I think this is solved, too.

Involvement of insurance companies would naturally lead to different rates based on assessment of risk and clauses in the contract. For example, they could offer reduced rates to those who receive certain types of training - like teen drivers, private pilots, etc.

That’s something government has a very hard time doing.

However, when a gun falls into their hands due to a shooting event, lost property, traffic stop, etc., government CAN determine whether the gun owner is insured.

35

Life insurance generally has a time clause for suicide. It won’t pay out if you got insurance the week before, but after 2 years or so suicide is payable to your beneficiaries.

I’ve had teachers tell me (tongue in cheek!) that if you accidentally hit someone with your car, you might as well back over them because injuries are on average more likely to be financially draining than deaths!

36

What does it mean to say it’s solved? The question is if there would be payout and who receives it? Does the estate of the deceased get a payout from their own policy in the event of suicide? Does a robber who is shot and injured by a shopkeeper get a payout from the shopkeeper’s insurance?

37

I’m concerned about de facto discrimination in insurance markets and it’s worth considering when the system is set up. That said, I believe almost any system resembling mine is so superior to the status quo that having to quibble about the marginal problems like this seems like an enormous victory.

It doesn’t matter. The insurance still covers the gun. The insurer can ask you your purpose if it believes that it will help it to price the risk accordingly. If it doesn’t believe that intended use is a good indicator of risk, it won’t bother asking. The policy cannot be voided for use outside the intended use. You could allow insurers to take action against the gun buyer for any subsequently discovered fraud in the underwriting process. However, the policy could only be cancelled if the gun is destroyed or a new policy covering the gun is issued. So, if there was fraud in the underwriting process, the insurer could sue the gun buyer to reprice the contract, require the gun buyer to find a replacement contract and then rescind the original, or require the gun buyer to turn the gun in to the insurer (who is still responsible for it).

A bond is a type of insurance policy. The OP didn’t specify so I clarified that I am proposing a bond.

I agree that it’s not about punishment. I don’t know what the Seattle proposal is so I can’t comment. My idea is to price the externalities of owning a gun into the decision to purchase the gun itself. It’s intended to use private insurance markets to help find the ideal level of gun ownership in America and the right mix of guns. I can’t help but think right now we have more guns than we need and maybe the wrong types of guns to really benefit us.

Cars in approximately 49 states require insurance to be on the road. As a practical matter, a car on blocks in the driveway isn’t much of a liability risk so there is no real need to insure it. Guns are different. Guns in the home can still cause the externalities. They can be fired through walls, fired inside the home at people who shouldn’t be shot, or they can be stolen. So, I recommend that we price these externalities for all guns in America with insurance.

Yes, it’s a bond. The buyer (starting with the first buyer after the manufacturer, i.e., the dealer) gets it and it transfers with the weapon. It may be cancelled if it the gun is either destroyed or if it is insured by some subsequent insurer. I would expect that gun dealers would get fairly cheap insurance that was largely refundable when a retail buyer gets their own insurance. The insurance cannot be cancelled if the gun is missing. If it turns up in a murder scene, the insurer is still liable.

It’s not a tax. The government is not involved in providing the insurance or collecting the premiums.You pay fair value for insurance from any adequately licensed and capitalized private insurer willing to insure the gun. The insurer will charge you the fair market premium for the risk that they believe your gun entails. That could vary based on whatever factors the insurance company thinks are important, except, as I noted above, for race, religion, or gender.

I have an agenda in promoting the safe usage of guns and minimizing the costs that guns impose on people other than their owners. I don’t intend for it to be prohibition. I would propose that you could own any gun you wanted that you could get insured. As I said, it’s also not registration. It could even be completely anonymous. If a gun dealer wants to sell you a gun with his insurance still attached, he could do so. Of course, he would lose whatever refund he might otherwise be eligible for from the insurer if the subsequent buyer had reinsured it. Also, the gun dealer’s rates would probably skyrocket if he were to start selling guns to anonymous buyers who then funneled the guns into the criminal market. Doing so would be a really disastrous short-term play for most gun sellers. It also wouldn’t supersede traditional background checks for buyers so finding the subsequent buyer would only be as hard as it is today. In the meantime, the people hurt by the guns would have recourse against insurers.

Bone, as I noted above, I would allow insurers to exclude suicide from coverage mostly because I wouldn’t want to trigger the moral hazard you suggest and excluding suicide altogether just reduces the amount of litigation. Alternatively. I also said that insurance companies can sue to recover damages from the tortfeasor. If someone commits suicide, he is the tortfeasor who caused the harm. Effectively, the insurer would be liable to pay the estate the amount of damages and to collect from the estate the same amount. It’s a wash. This is imperfect because guns make suicide much more likely to be successful and there is a reasonable argument to be made that the gun buyer should be responsible for subsequent suicides with the gun and that the insurance policy should account for this cost too. That can be a fight for another generation. In the meantime, we can use mandatory insurance to cut down on the amount of uncompensated gun homicide damages today. Besides, if we cut down on the number of guns circulating, we might also cut down on the number of gun suicides as a helpful byproduct.

If a shopkeeper thwarts a robbery by shooting the attacker and the attacker subsequently sues, the insurance company can countersue the attacker, who was a tortfeasor. No damages for the attacker if the shooting was justified.

38

What he said. Piling onto Falchion’s point above, liability insurance policies are for insuring against accidents and negligence. Not intentional acts. What portion of firearms casualty losses are due to negligence or accident, and not criminal behavior?

IIRC, for deaths/injuries, negligence homicide and accidents account for under 5% of the total firearms’ injury and death pool. CDC puts out stats on it, for those with more time.

Given that, the motive for advocating this proposed regulation seems like how Pantastic phrased it up-thread.

I’m sorry your friend is dead, Czarcasm. I’m sorry for your loss, and assuming it was due to foul play, I hope they catch the bastard that did it.

39

There’s no litigation component for insurance typically unless there is a dispute. Assume the fact pattern in a robbery is undisputed where the robber is injured as a result of a shopkeeper using a gun. Is that a covered event where the robber would be able to claim damages against the policy?

Even as you restate it, why is there no damages if the shooting is justified?

40

Yep, it is just a “reasonable sounding” way to ban guns.