Insure Your Piece

If you are going to own a firearm, you should insure it. You buy insurance for your car to protect yourself and other drivers from liability. You buy home owner’s insurance when you take out a mortgage. You buy renter’s insurance when you rent a property. You cannot practice as a lawyer or a doctor without liability insurance. Owning a gun is just as important a responsibility.

Insurance provides us all with financial security in case of an accident that damages you or others. It guarantees that you will not go bankrupt paying for those damages and ensures that your victim has a means of compensation as well. Insurance also discourages people from acting recklessly. A thoughtless act or even a no-fault accident may cause the insurer to charge you higher premiums; it may revoke coverage altogether for high-risk individuals with long-standing patterns of troubling behavior. On the other hand, years of claimfree living could lower your premiums over time.

Insurance companies also collect data about people’s behavior and the claims they file, information that can reveal important patterns and insights for saving lives. Insurers have an incentive to mitigate risk, and they conduct research about how individuals can act more responsibly, sometimes even launching public campaigns encouraging people to do so or lobbying Congress to adopt sensible policies.

Requiring liability insurance for firearm ownership would create a series of positive incentives that would help achieve the goal of a future with fewer guns.

Store your guns safely, enroll in a gun-safety course, purchase a less dangerous firearm, go without any incidents for a long period of time, and you will benefit from insurance discounts; use guns in a way that leads to gun accidents, and you will pay a higher price. It’s about time people had some financial skin in the game and victims of gun crimes or accidents had a clear path to compensation.

The Compact proposes that states require liability insurers to offer insurance for gun owners and that those who choose to own a firearm be insured. States could also consider mandating that a portion of insurance premiums be diverted into a special compensation fund for victims.¹

Insurance could help reduce the two-thirds of gun deaths that are suicides by increasing the delay between purchase and firearm acquisition, imposing a waiting period that would have some impact on the suicide rate, as people in crisis are far less likely to kill themselves once the moment of crisis has passed. Insurers may also develop screening mechanisms for denying liability insurance to high-risk individuals, thus depriving them of an efficient way to kill themselves. All of that is good news.

While the benefits of insurance are clear, some natural obstacles arise. Insurance policies may cover only a fraction of gun deaths, most obviously accidental discharges. Those make up approximately 2 percent of all gun deaths.

The question is: can an insurance company insure a gun owner who uses a firearm to commit intentional harm—the 35 percent or so of gun deaths that result from assault or homicide? In other words, if someone shoots me, would the insurance company have to pay out a claim that covers my medical bills? Would insurers have to cover that kind of criminal behavior?

Short answer: it’s possible. Insurers do already insure against illegal acts. Automobile insurance policies, for instance, provide coverage for bodily injury or property damage when people drive under the influence of drugs or alcohol. These are criminal acts that insurance companies cover because there are so many of them and they occur so frequently. Excluding coverage for driving while under the influence, therefore, would defeat the purpose of insurance and deny compensation to victims.

Now, to be sure, an insurance policy cannot prevent someone from premeditating a shooting. If other psychological factors and deterrents are not stopping you from killing someone, an insurance policy certainly will not. However, gun-crime insurance could provide a revenue stream for dealing with the economic consequences of gun violence. Some estimates place that price tag at over $100 billion per year for lost wages, medical bills, depressed property values, and increased costs to the criminal justice system.² If insurance policies can help defray some of those societal costs—by forcing us to take some degree of personal responsibility for our actions—would we not all be better off?