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Writer's pictureJake

Gun Insurance: How would it work?

Updated: Feb 23, 2021


Few issues are as divisive as gun control policy, but could a well thought out gun insurance market strike a middle ground?


The Goal:

The ideal gun control law that would decrease the number of guns in the hands of those most likely to inflict harm on others, protect American’s free exercise of their 2nd amendment rights, and support citizens who use guns to deter crime and protect themselves and others.


The Proposal:


Every gun owner must hold insurance against the risk of their gun harming another in a crime or accident. The market for this insurance would be entirely in the free-market, with government meddling limited only to the lawful requirement of insurance. Groups that might offer this insurance could include the NRA, USCCA, Bass Pro Shops, Cabelas, Allstate, Geico, and others.


Here is how it works. Base coverage rates are mandatory at state level, much like the liability insurance carried on your car. Naturally, premiums will be based on risk. If you are a 20 year old gang-affiliated male in Baltimore, your premiums will be prohibitively high. If you are a mountain man in Montana, your yearly rate might be paid in pocket change. However, even that pocket change is not entirely wasted because it represents the extremely small chance of a hunting accident rather than a crime. If such an accident were to occur, the mountain man’s insurance would amply compensate the affected party.


Only the information the gun owner wishes to provide to the insurance company will be in file. Of course, the insurance company would be suspicious of what seems to be purposeful concealment of personal details, and the premium would vary accordingly. Many people would opt to offer plenty of information to lower their premiums. Some might take safety classes or purchase a safe and provide this information. The actions taken to lower risk would be voluntary, and the information would be sent to a trusted insurance company of the gun owners choosing, and not to a government database.


If an insured gun owner murders someone, their insurance will split the payout to compensate the victims and the law enforcement in the jurisdiction. If, however, someone uses their gun to prevent a crime in a lawful manner, the law enforcement in the area must pay the gun owner’s insurance company. If a law enforcement agency is too small to self insure against such a cost, they must hold insurance against the risk that they may fail to protect their citizens.


Insurance companies may see that some people would warrant negative premiums due to the far greater likelihood that their gun ownership would lead to crime deterrence and subsequent payouts to the insurance company. It is likely that such people would be offered training and instruction on how to lawfully defend themselves and others.


Frequently asked Questions


Response 1:

Why wouldn’t a criminal just skip this insurance stuff and buy a black market gun?

Answer: They probably would. The difference is if a law enforcement officer sees that someone suspicious has possession of a gun, currently there is little they can do, if no local ordinances stand in the way of open possession. If the gun is not registered to them, a legitimate response could be, “It’s my friend's gun”, and they would be free to go.


With this gun insurance proposal in effect, the officer would ask if they have proof of gun owner’s insurance. If the answer is no, that gun would be taken until they prove they hold a policy. This is a small improvement in dealing with the black market gun problem but an improvement nonetheless. There no easy answer to this particular problem. As the thriving drug trade proves, the government is not exactly good at stopping black markets. Under this proposal they are given one more tool.


Response 2:

Insurance doesn’t fix the fact that people will still get shot so…..


Answer: True, but the only way to 100% stop people getting shot is to remove all guns. This is impossible to do peaceably. It would also be a violation of the 2nd amendment of the Constitution and a violent offense against individual property rights. Disarmament by force of law suffers from the much cited problem that only criminals would then retain their guns. What a market of competing insurance companies would do is examine individuals on a per person basis and discourage potentially dangerous owners at the margins, while subsidizing those who protect against crime. Government programs and rule of thumb laws simply don’t have the same pixel density and nuance to encompass nearly as much of the variability as a highly competitive market does. To reiterate, this will push potentially criminal or irresponsible gun owners out of the market at the margins. It also would give law enforcement an additional means of preventing a gun crime by having the ability to inspect the paperwork of any person in possession of a gun without escalation. In the real world, this is as good as it gets. Furthermore, compensating victims and bolstering law enforcement budgets certainly counts for something.


Response 3 Why should a Law Enforcement Agency have to pay an insurance company? Isn’t that wrong?


Answer: If an insured gun owner breaks into another insured gun owners home to kill him and is shot, insurance will be paid in the following way. The police pay the homeowner's gun insurance company and then receive a payment from the intruder’s insurance company. In this way, the police have an incentive to make sure that anyone who may commit a gun crime has insurance and that no citizen should have to use a gun to prevent a crime in the first place. If law enforcement agencies only stops crime, they will be the beneficiary of this program. Whereas, if the citizens in the area are forced to defend themselves, the agencies pay the price. In this way, the agencies are held to account in the areas where their intervention should matter most.

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