Gun Liability Insurance Bills Aren’t the Answer, Says Insurance Industry

[slackmaster]

Presented for general discussion in General Discussion:

Congress appears ready to take up gun control legislation for the first time in years, with proposals under consideration focusing on background checks, straw purchases and money for school safety.

If the debate stays on those issues, the insurance industry will be mostly on the sidelines but if any bills requiring that gun owners carry liability insurance start to move, the industry’s lobbyists can be expected to spring into action....

...One gun insurance bill has been filed in the House. Rep. Carolyn B. Maloney, D-N.Y., has filed the Firearms Risk Protection Act of 2013 (HR 1369), which would require gun owners to purchase liability coverage and to show proof of that coverage when they purchase a firearm....

...“Liability coverage is designed to protect against accidental damages, most of which involving guns would be covered under a homeowner’s insurance policy. While some policies may provide coverage for liability stemming from the intentional use of a firearm for defensive purposes, no liability insurance product covers intentional acts of malicious violence, whether committed with a gun, a car, or any other instrument that is used as a weapon to deliberately harm people,” said Grande. “It is inconceivable that any insurer would offer such coverage, either as part of a homeowners or renters policy or on a stand-alone basis....”

Please see the rest of the copyrighted article at http://www.insurancejournal.com/news/national/2013/04/10/287849.htm#

There is much more in the copyrighted article on the Insurance Journal's online edition, including mention of how companies would determine premiums. Generally, policyholders who are found through actuary data to be at higher risk of accidental damage pay higher premiums, and people who are at lower risk pay lower premiums. To me the most compelling point made in the article and some of the comments are that no company is going to cover damage caused by gross willful or criminal misconduct; and that standard homeowner's and renter's policies already cover damage from genuine accidents. In fact a large percentage of people who own guns already have some liability coverage.

[leftyohiolib]

1. guns in the house should make that owner a high-risk and should be billed accordingly

[slackmaster]

2. If a gun in the house actually made the homeowner a high risk, the insurance industry would already

...know about it, and it would be either charging higher premiums for homes with guns, or offering gun-free home discounts just as they do for smokers.

[hack89]

5. The actuary tables say otherwise

that is why it cost me so little despite a safe with 4 AR-15s and a couple of handguns.

Insurance companies know risk like no other business. The math is simple - tens of millions of gun owners but a handful of accidents.

[JVS]

6. And this shows up where on the actuarial tables?

[Lizzie Poppet]

11. An interesting assumption on your part...

...but one not reflected in the cold light of the numbers contained in insurance industry actuarial tables.

[rickford66]

30. How would your insurance company know if you had guns ?

I've had homeowner policies since the early 70's. I've never been asked if I had any guns. I've been asked if I had a wood stove and I had to have a fire marshall inspect it and write a letter of approval for it. Since we live in a rural area I've had to prove there's a water supply within so many feet of our home. I've never been asked about guns.

[leftyohiolib]

34. they ask if and rely on your honesty and if your house burns down and the finds guns in your home

then you are denied all claims. they ask you untill the background checks are in a national database that the insurance companies can check

[slackmaster]

44. I told my agent that I have firearms, and asked if they were covered against fire and theft.

They are, just like other items in my home - Called "unscheduled personal property."

[rickford66]

53. I thought the discussion was

meant to be about liability insurance coverage. Unless the insurance company asks if you have guns, how can they apply actuarial information to your premium?

[slackmaster]

54. A retired actuary told me that any risk posed by a person simply owning a gun is so small...

...that it isn't worth the insurance company's time to quantify it and dick around with premiums charged to gun owners vs. non-gun owners.

It's like a lot of other things. People who own chainsaws are far more likely to suffer a chainsaw injury, people who burn candles are more likely to have fires, but the risks are so small it doesn't make economic sense to compute the cost in terms of risk.

[SoCalDem]

3. Of course they would say that.. Those policies would demand lots of payouts

Insurance companies like to keep those premiums and then not pay claims ..It's how they can afford those highly paid CEO & all those nig shiny buildings

[slackmaster]

4. A large number of people who own guns already have liability policies that pay out for consequences

...of accidental shootings. I do - My homeowner's policy.

If all gun owners were required to have liability policies, the insurers would charge premiums sufficient to cover the risk liability, just as they do for all types of insurance now. If Congress or some states pass bills with that kind of requirement, the insurers (and the NRA, which already has a sponsorship agreement with an insurance company for firearm liability policies) would stand to make money from it.

A liability policy for simply owning a gun would be very inexpensive - A lot less than a renter's policy costs now.

[kudzu22]

8. It's not the payout -- it's the predictability

An insurance company will sell you insurance against the sun rising in the east. Your $100 payout will cost you $105 in premiums. I'll sell you that policy all day long.

There's no actuarial table for intentional acts. Intentional acts are by definition not random chance events. They can estimate the likelihood that you'll get cancer, lose your job or get hit by a bus. They don't have any way to estimate the "risk" of you intentionally shooting someone, and being that you are the beneficiary of such an event, makes it not an insurable risk.

Sorry if I sounded too officious there. I sometimes get frustrated when people don't understand the purpose of insurance.

[SoCalDem]

9. That was "sort of " my point

although not as diligently put as you did.. The insurance company would never have any way to "figure" the true costs and might end up paying out a lot of money.. (why rates are so high for smokers (health/life ins), and bad drivers (car)..

Guns? anybody's guess.....but since guns are made to be lethal, someone may just die or be injured..

Personally, I'd like to see a $50K liability policy attached to every weapon..and at least every other year testing/registration (our car has to get smogged every other year and we have to register every year..

Have all the guns you want, but carry a license, get tested, get insured and re-register so we always know where that gun is ans who's using it ..and carry enough liability so that when you shoot someone their family can afford to bury/hospitalize your victim.

[spin]

13. Of course that would pose a major burden on poorer people ...

but gun control has often been used to limit the ownership of firearms to the rich and privileged or the ruling class.

Criminals would not buy insurance for their illegal firearms and since many honest people in the poorer crime ridden areas would effectively be disarmed, they would have far less fear of encountering an armed home owner while breaking into a house. The violent crime rate might rise dramatically.

[oneshooter]

15. Why don't you go ask a agent if they offer that policy.

And also ask if they carry voters insurance.

[kudzu22]

32. I understand what you're trying to get at

The problem is that in order to have a liability insurance policy, you have to first have a legal liability. If you're cleaning your gun and it goes off and shoots your neighbor, you're legally liable, and your homeowner's policy (in most cases) covers you against such damage claims.

If you take your gun and intentionally shoot someone, you're legally liable but it's not an insurable risk since it's an intentional act by the policy owner.

If someone steals your gun and shoots someone, you're not legally liable for what the thief/murderer does, so there is nothing to insure. If someone did try to sue you it would be thrown out immediately. You're not responsible for the criminal acts of others. If you want to force people to pay for that, you have to first establish that the gun owner is liable for acts committed by others with his gun. That would be a tough sell indeed.

[Robb]

10. Then how do insurers cover theft?

[slackmaster]

12. Theft insurance works by compensating the INSURED PARTY for the loss.

Note that the INSURED PARTY is not the person who committed the theft.

The probability of someone becoming the victim of a theft can be estimated by statistical analysis of reported thefts.

[Robb]

17. Can I not carry theft insurance, and name a third party as a beneficiary?

[slackmaster]

18. Sure, but it won't pay out if you or the beneficiary are the one who commits a theft.

[Robb]

19. Could I also pay to insure a third party?

[slackmaster]

20. Yes.

Where are you going with this, Robb?

[Robb]

22. Don't insure the gun owners, insure everyone else.

I'm imagining a system where every gun owner buys into a pool that provides coverage for victims of gun violence. Means test it, perhaps, a sliding scale. But surely the potential pool of participants would be so large that the cost per gun would not be onerous?

[slackmaster]

23. That's ridiculous. Why should anyone be held responsible for the misdeeds of someone else?

It's not reasonable, Robb.

[Robb]

27. Why do I pay for roads I do not drive on? Schools I don't attend?

Why do I pay car insurance at all? I'm a careful driver.

There's nothing ridiculous about sharing the collective responsibility here.

[slackmaster]

40. The same reason I do.

EVERYBODY pays, not just people who choose to own a particular tool.

[Robb]

46. Not everyone pays the same amount, however.

[slackmaster]

49. I pay more than most people do

And I'm not complaining about it.

[magellan]

29. It's done with auto insurance.

"Auto insurance fraud adds $200-$300 a year to your individual insurance premium, according to estimates from the National Insurance Crime Bureau (NICB)."

http://www.edmunds.com/auto-insurance/auto-insurance-fraud-what-it-costs-you.html

[slackmaster]

38. Well then, maybe the individuals who commit insurance fraud should be prosecuted.

[magellan]

55. They are, when caught

But also, everyone who pays for car insurance is paying for the insurance fraudsters' misdeeds.

Don't know why the same thing shouldn't be applied to gun owners.

[slackmaster]

58. So you think people who pay for liability insurance should share the cost of fraudulent liability...

...insurance claims.

Makes sense.

[magellan]

59. Are you being deliberately obtuse?

Because I happen to know you're smarter than that.

You said to Robb's suggestion of insurance, "That's ridiculous. Why should anyone be held responsible for the misdeeds of someone else?"

Every insured driver is "held responsible" for fraudulent insurance claims by paying more in premiums. I don't see why gun owners shouldn't have to do the same for the irresponsible among them.

edit: had it right the first time....

[slackmaster]

60. No insurance policy pays out for damage caused by the insured party's willful, unlawful acts.

Car insurance works the same way - Because no policy will pay damages for a drunk driving-related crash or vehicular homicide, those costs are not reflected in peoples' premiums. Costs for those events, beyond what can be recovered in civil action against the person who commits them, are shared by society at large.

Most gun owners already carry liability insurance, because we either own homes or rent them and have homeowner or renter insurance policies, just like everybody else who has assets worth protecting. We pay our share of premiums to cover liability for everyone in the pool.

Insurance fraud is a tangential issue at best. It really has nothing to do with the topic of this thread. But I do appreciate the free kick.

[magellan]

61. Insurance fraud is not the issue

The mechanism of charging everyone - drivers or gun owners - an additional premium for the misdeeds of some is.

afaik, there's no additional premium in homeowner's insurance for gun ownership.

[slackmaster]

63. Correct. There is no additional premium for a homeowner who owns a gun. Nor does any...

...insurance company offer a discount for gun-free homes.

The risk posed by simply owning a gun is so small that it isn't worth the insurers' time to quanitfy the risk and modify their premium structure. If they could make money doing that, they would have done so a long time ago.

The mechanism of charging everyone - drivers or gun owners - an additional premium for the misdeeds of some is.

You still seem to be overlooking the fact that insurance policies don't pay for damages caused by actual misdeeds.

If I accidentally discharge a firearm and injure someone, my homeowner liability policy will cover damages up to the policy limit. I can be sued for additional damages.

If I get drunk and crash my SUV into a school bus full of nuns, my automotive liability policy won't pay a penny. I can be sued for damages.

[magellan]

66. Maybe I'm not being clear

Forget about the payout. I'm not interested in that. I'm not even really arguing that insurance for gun owners is necessarily a good idea.

I'm simply saying that people ARE held responsible for the misdeeds of others by insurance companies, by increasing their premiums to cover the cost. It's done to every driver. Hell, for all I know the risk of gun ownership is included in everyone's home insurance premium.

[petronius]

69. I think that's a somewhat inaccurate framing: policy-holders aren't being

"held responsible" for the misdeeds of others, they're the victims of those criminal acts (through the medium of the insurance company). And the people who defraud the insurance companies retain all the responsibility for that act - none of the responsibility transfers to the policy-holders, just the victimization.

But what the gun-insurance advocates are proposing is something different: it's an insurance scheme that would be almost 100% designed to pay off those violent-crime-created claims (analogous to the fraudulent claims of your car insurance comparison), and barely at all related costs produced by the policy-holders themselves. That, in contrast to the car analogy, is a very real transfer of responsibility/liability onto the innocent.

What it sounds like Robb is proposing is most like a private copying levy, in which all purchasers of recordable media pay a surcharge in order to provide royalties to content providers that is intended to replace revenue lost due to private copying. Personally, I think all such schemes are improper, due to the inevitable unfairness to consumers not responsible for the illegal behavior...

[magellan]

70. One could say responsible gun owners are victims

...of irresponsible ones. In fact I've heard many of them identifying with that characterization.

But as I said, I'm not advocating for any insurance scheme. Just contributing thoughts, knowing there are better heads mulling over this issue than mine.

[petronius]

71. The difference, though, is that in the gun-insurance scheme the victimization

of the policy-holder (responsible gun owner) only occurs through the operation/mandate of the insurance requirement itself.

In the car-insurance model the criminal (fraudster) steals from the company and therefore the policy-holder directly. But in the gun-insurance model the criminal victimizes a third-party, and then the the system transfers some of that cost onto the innocent policy-holder (or, equivalently, transfers some of the responsibility from the criminal to the policy-holder).

So in that system, it would be inaccurate IMO to characterize the responsible gun owner as the victim of the irresponsible one - the policy-holder becomes an additional victim, created by the insurance process.

In general, I would say that every gun owner - like owners of lots of things - should be able to accept responsibility for and make good the consequences of his own acts or negligence. But I don't think it's appropriate to transfer cost/responsibility for third-party acts onto individuals who had no hand in the crime or negligence, whether it's guns or music piracy or anything else.

(I do recognize that you're not advocating, and I appreciate your thoughts as well as the positive way in which they're expressed... )

[slackmaster]

73. Fraud and waste contribute to the cost of everything we pay for, including government

The problem isn't limited to insurance policies.

[PA Democrat]

33. Who do you think is already paying for the medical care of gun shot victims?

For lost wages, for the costs incurred by the justice system, etc., etc.?

Meanwhile, taxpayers here spend billions each year paying health care costs to treat gunshot victims, the strong majority of whom, research indicates, are uninsured. Taxpayers spend even more money covering societal costs, such as long-term psychological problems, disability, and the loss of productivity suffered by approximately 70,000 Americans who suffer non-fatal gun shot wounds annually.

Following the school gun massacre in Newtown, CT last month, Bloomberg News reported:
The cost of U.S. gun violence in work lost, medical care, insurance, criminal-justice expenses and pain and suffering amounted to as much as $174 billion in 2010, according to data compiled by the Pacific Institute for Research and Evaluation in Calverton, Maryland.

That averages out to more than $644 in costs for every gun owned in America. As economist Ted Miller, the Institute's principal research scientist told Bloomberg, "Gun ownership is like smoking, an expensive and dangerous habit."

So yes, gun violence is America represents an epic and costly health care problem, which is why it makes sense to include health care providers in any comprehensive attempt to combat the crisis. (On Wednesday, the White House announced the administration would "issue guidance clarifying that the Affordable Care Act does not ban doctors from asking patients "about firearms in their patients' homes and safe storage of those firearms.&quot

http://mediamatters.org/blog/2013/01/18/sorry-rush-gun-violence-is-a-health-care-issue/192320

[slackmaster]

37. Everyone pays for that. We all share the burden through our taxes.

[PA Democrat]

42. Really? Where do I sign up to have the government pay my health insurance premiums

and my copays?

[slackmaster]

43. Most gunshot victims are poor and don't have health insurance.

Violent crime doesn't have much impact on your health insurance premiums. They typically show up at hospital ERs and get just enough treatment to stabilize them, and the hospital doesn't get paid.

The cost of caring for crime victims gets absorbed by society in general.

Criminals are responsible for the cost of their crimes. You and I are not. We just get stuck with the bill because there is usually no way to collect from the individuals who are actually at fault.

[PA Democrat]

45. Wrong. When hospitals don't get paid for treating an uninsured gunshot victim

the costs are passed on to everyone else in the form of higher charges for ER treatment which translate into higher insurance premiums.

From the paramedic's first IV to the surgeon's precise work, from police scouring a crime scene to the shooter's time in prison, shootings in Milwaukee cost tens of millions of dollars a year.

Most of those costs are absorbed by taxpayers, hospitals and people with insurance.

Gunshot wounds reverberate to areas far from the neighborhoods where the shots were fired and to people well beyond the families whose loved ones were on either side of the gun.

The average charge for a gunshot victim admitted to Froedtert Hospital was more than $38,000 last year, when the hospital treated 236 such patients.

http://www.jsonline.com/news/milwaukee/29205944.html

[slackmaster]

48. The Affordable Care Act will ensure that everyone pays a fair share

Everyone will have to either have health insurance, or pay the penalty.

That's as fair as it could be.

[PA Democrat]

56. Hopefully, it will help. But my point was that it is NOT the case

currently. The costs are passed onto everyone else who has health insurance. When you are self-employed those premiums are painful.

[oneshooter]

21. Yes you can, and name yourself as beneficiary. That way you can be just like Wall Mart!

[X_Digger]

14. A criminal act by a third party, not the insured.

Duh.

[kudzu22]

31. Theft is not an act by the policy owner

It's something that happens to the policy owner. Insuring you against something YOU might do is another story entirely.

[Donald Ian Rankin]

57. As opposed to those gamblers who prefer to offer bets where the odds are against them?

Insurance is a form of bookmaking - nothing more, nothing less.

All bookmakers offer bets where they think the odds are in their favour, and there's nothing wrong with that - no-one has to bet (except in America, where rather than a proper healthcare system you have mandatory gambling, for some reason).

[bluedigger]

7. It makes sense.

They can't legally cover unlawful acts, and there is no model of profitability for them to cover accidental lawful discharges separately. No profit, no interest.

[X_Digger]

16. Of course no insurance will cover intentional acts.

I'm sure some of the legislators proposing this actually know that.

This is just a measure to try to make firearms ownership more onerous, suppressing a constitutionally protected right via too-cute-by-half means.

Free clue to those who propose such: your motives are transparent.

[JVS]

24. If this doesn't make sense, think of car insurance.

Car insurance covers liability for accidents, but your car insurance is not going to pay a civil suit for damages related to you committing vehicular homicide. That lawsuit will be for your personal assets.

[cherokeeprogressive]

25. Wanna put millions of dollars into NRA coffers?

Require gun owners to buy insurance from them. Anyone think someone will offer it cheaper? I don't. I imagine they're secretly lobbying for it as I type this.

[liberal N proud]

26. The insurance companies don't want to pay for the next rampage

[slackmaster]

36. RTFA - No insurer is ever going to cover for willful criminal acts

That's the point.

[graham4anything]

28. Full reinterpretation 2nd, then after NO guns/bullets in hands of private citizens

zero tolerance after 21 days.

zero guns and bullets after that in the hands of private citizens

Nothing else will get the desired result.

[slackmaster]

35. If you don't trust "private citizens" with firearms, why do you trust government employees?

[graham4anything]

39. They are needed to stop anarchy,vigilantism(Zimmermans)chaos and crime.

After all, when you are in trouble, who do you call?

[slackmaster]

41. I take care of myself when I am in trouble. Police usually manage only to clean up the mess.

Their job is not to protect individuals.

[graham4anything]

50. That is what Zimmerman said, and he killed the man who might have cured cancer next year

[slackmaster]

51. ...or become the next Adolf Hitler.

[ohiosmith]

62. This post was alerted on. The jury voted 5/1 to let it stand!

At Thu Apr 11, 2013, 07:53 PM an alert was sent on the following post:

...or become the next Adolf Hitler.
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2656329

REASON FOR ALERT:

This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate. (See <a href="http://www.democraticunderground.com/?com=aboutus#communitystandards" target="_blank">Community Standards</a>.)

ALERTER'S COMMENTS:

Implies Trayvon might have deserved to be shot.

You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Thu Apr 11, 2013, 08:05 PM, and the Jury voted 1-5 to LEAVE IT.

Juror #1 voted to HIDE IT and said: No explanation given
Juror #2 voted to LEAVE IT ALONE and said: "Implies Trayvon might have deserved to be shot." - That's more than a bit of a stretch.

Context: graham4anything's idea that Trayvon Martin "might have cured cancer next year." Unlikely and hyperbolic. slackmaster's response: "...or become the next Adolf Hitler." Unlikely and hyperbolic. And accompanied by the "sarcasm" GIF.

Dumb argument. Even dumber alert, IMHO.
Juror #3 voted to LEAVE IT ALONE and said: No explanation given
Juror #4 voted to LEAVE IT ALONE and said: Jesus Chirst! It implies nothing of the kind! Leave the post!
Juror #5 voted to LEAVE IT ALONE and said: No explanation given
Juror #6 voted to LEAVE IT ALONE and said: There's a sarcasm tag in the post - meaning that it's not to be taken literally. Duh.

[slackmaster]

64. Smart jury. At least most of them. It was an absurd hyperbolic response to absurd hyperbole.

A reductio ad absurdum.

I'm glad there are still some people on DU who comprehend satire. I think most of the ones who don't already have me on Ignore.

[ohiosmith]

65. Juror number one!

[graham4anything]

68. You are not satire. You are one of the NRA gungeon denizens with NRA soundbytes.

Mr. Trayvon Martin was shot by a man with a gun, who was told by cops to back off, and he came to use that gun.

Zimmy came to lynch Mr. Martin and did.
Zimmy is the poster person of the NRA.
Everything the NRA wants, is in Zimmerman.

the right of all Americans to be Zimmerman, any time, any place and then say lies and say the 2nd and the right to carry and all is fine.

You don't seem to hold Mr. Martin in much esteem, do you?
He was a good kid, who was minding his own business, with a bright future ahead of him.

Zimmy on the other hand was like Bernie Goetz. A cold blooded type with a gun and bullets, looking for a kill, like a hunter looking for a deer to bag.

The irony of Zimmy is, had Mr. Martin had a gun, he would have been 100% in his right to shoot Zimmy as Zimmy was a clear and present danger, stalking, harrassing him, and finally after being told to back off, shooting him in cold blood.

[slackmaster]

72. Besides being gramatically challenged, your post intentionally mischaracterizes my views on...

...the shooting of Trayvon Martin, which I have posted on DU dozens of times. And I am quite sure you have read my posts.

[graham4anything]

74. No, actually I am not. But you can explain your position.

How you got the name you said he was, I don't understand and calling someone who was killed because of what they are the name of someone who killed 20 million in gas chambers including 6 million Jews, I don't understand.

But btw, I didn't call it in nor vote on it. I value people's opinions and don't vote to hide much
unless it breaks a serious rule unrelated to the editorial content.

[slackmaster]

75. Everyone is free to use the search feature for my comments on the Zimmerman case

I encourage people to do so rather than rely on graham4anything's innuendo.

I stand by everything I have written about the incident.

[graham4anything]

76. I stand by my view on it. The call to police meant his life was not threatened

or to harken back to an old thread in your group

If Zimmy had a bowling ball, no one would talking about the case as Mr. Martin would be alive and zimmy would not have his financial and legal problems.

[CokeMachine]

47. "After all, when you are in trouble, who do you call?

Bloomberg? Did I get it right? What do I win?

[Union Scribe]

67. "to stop anarchy"

Oh yeah. Like those OWS folks you aren't fond of. The ones you compared to the Republican staffers who interfered with the recount in 2000. You want the government to have guns to "stop" them eh?

[Politicalboi]

52. I'm all for insurance

But homeowners who own guns should get a rate increase. And if you conceal carry, you should have to pay a lot to take that out into the public. I don't trust your shooting, so why should I be at risk with cowboys running around thinking they're the Lone Ranger. Make people who carry in public pay through the nose.