Thursday, February 21, 2013

NYT: Many state legislatures considering mandatory liability insurance for gun owners

The New York Times has a story this morning that explores a new trend in firearms legislation: bills requiring gun owners to purchase liability insurance policies.

The article indicates that at least six states are debating such a policy approach.

One of them - New York - is considering a proposal to mandate a minimum of $1 million in liability coverage resulting from "negligent or willful" acts involving the use of a firearm by the insured owner.

The measure would require a prospective gun owner to acquire the insurance before obtaining a gun and, in the case of current gun owners, set a deadline of thirty days after the law takes effect.

A similar proposal in Maryland would set $250,000 as the minimum insurance coverage.

Other states in which legislators are considering whether to require gun owner to carry liability insurance on their firearms are California, Connecticut, Massachusetts, and Pennsylvania.

The bills introduced around the nation this year are the first since Illinois legislators rejected a similar idea in 2009.

According to Robert Hartwig, an economist and president of the Insurance Information Institute, a major problem with the idea is that, in several of the states in which the bills have been introduced, the proponents do not distinguish between an insurance mandate applicable to accidental damage resulting from use of a gun and illegal use of a firearm.

Such an all-inclusive coverage mandate would be contrary to long-established industry practice.

"They have not historically, they do not today, and they will not in the future," Hartwig said, referring to insurance companies. "This is not unique to gun coverage. I think most people believe that’s the way things would be."

Moreover, Hartwig argued, firearms liability insurance is not needed to provide a disincentive to misuse of a weapon.

"The gun owners have a pretty strong disincentive right now," he said. "Obviously, they face criminal charges and prison time, not to mention lawsuits, as a result of [illegal] activities. I’m not sure the payment of an insurance premium is going to alter the incentive here. The disincentive to misuse the weapon already exists through the penal code."

Hartwig noted that accidental discharges of a firearm that cause damage to person or property are generally covered by homeowners or renters insurance policies. The National Rifle Association currently makes available to its members a supplemental insurance policy that allows for additional compensation to claimants in those circumstances.

The idea of requiring gun owners to carry liability insurance applicable to their firearms was apparently first broached in a 1987 law review article.

As of this writing no Colorado legislator has introduced a bill in the 2013 legislative session that would impose a mandatory insurance requirement on gun owners.