Warnings issued over gun-owner liability insurance model

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Following the Sandy Hook school shooting last December, nine states introduced legislation attempting to prevent future atrocities by requiring gun owners to carry liability insurance. However, the intended goals of such legislation would likely never be fulfilled, two experts in insurance law said during a University of Connecticut symposium last week.

According to George Mocsary of Southern Illinois University School of Law and Peter Kochenburger of UConn, the current model for liability insurance would neither deter gun violence nor provide adequate compensation for victims.

“The last year has seen a number of calls for legislation requiring would-be gun owners to maintain liability insurance,” said Mocsary, an assistant professor at SIU’s School of Law. “The idea is that it would serve as a private regulator of guns and compensate victims of gun violence. There’s good reason to believe, however, that insurance would fall short of both of these goals.”

Mocsary noted that under the current liability insurance model, nearly all intentional criminal actions are excluded from coverage.

Nearly 20% of gun violence victims are shot by criminals while committing a crime themselves, Mocsary said, while Kochenburger added that roughly 97% of deaths caused by firearms are the result of suicide or homicide—neither of which fall under liability policies.

Additionally, negligent entrustment and negative storage—which are sometimes used in attempt to provide coverage for criminal acts--aren’t recognized by many jurisdictions, “especially where a gun was stolen and then used in a crime.”

“And that accounts for a great deal of guns used in crime,” Mocsary said.

Insurers would also have difficulty adapting the existing auto liability model to firearms, as they have “no historical experience” in coverage for gun owners, who typically have between 0.5% and 3% as many exposures as drivers.

Kochenburger, an associate clinical professor of law at UConn, said that language within liability policies is also problematic. Most policies include exemptions when “an insured” inflicts intentional harm on others—a distinction that could make a great deal of difference to claimants.

“That one word—‘an’—makes an incredible difference,” Kochenburger said. “‘An’ means if any insured under the policy commits an intentional act, there is no protection for anyone under the policy.”

Kochenburger did say that because insurance is “highly regulated,” states would have the ability to require insurers to amend that language to properly comply with a potential insurance mandate and cover certain criminal acts, as they do with DWI.

However, he added that “insurers would absolutely not be happy,” as the estimated annual premiums of between $20 and $57 for gun liability insurance would provide very little profit.

Additionally, both Kochenburger and Mocsary point out that even in the event of a gun liability insurance mandate, criminals are highly unlikely to purchase insurance, meaning victims would not receive compensation.

“There’s no reason to believe a criminal who doesn’t fear criminal sanctions for homicide would fear a penalty for not insuring,” Mocsary said.
  • Steve on 11/27/2013 11:07:32 AM

    The naive' folks mean well but have no concept of how insurance works and get caught in the ignorance trap.

  • Tom Harvey on 12/1/2013 4:08:01 AM

    Insurance to protect victims of gun violence is very workable. It should be designed for the job. Regular liability insurance is not the best way. No-fault car insurance as it applies to those who don't have their own insurance such as pedestrians is a good model. Worker's compensation insurance is even better. The main problem is that criminals won't buy insurance. If the insurance is sold starting with manufacturers with a term that says that the insurer is responsible until some other insurer takes it over even if the gun changes hands illegally then coverage is guaranteed. That way the government doesn't have to register or track the guns.

  • Really? on 12/4/2013 7:22:29 AM

    The naive folks are the ones who endanger their family by having guns in their homes. They may mean well and think they are providing protection for their family but they are caught in the ignorance trap, to use Steve's elegant language. I would hope that none of them ever have to pay the price for their ignorance, but we know that will not be the case. In tomorrow's paper, or the next day's paper, their will be another "accidental" shooting of a gunowner's child. And so it goes.

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