A Mayor Proposes That Gun Owners Carry Insurance For Their Weapons

Firearm owners in San Jose, California would be required to have liability insurance for their weapons under a slate of proposals that the city’s mayor is backing with the hope of reducing the harm and public cost of  gun violence.

But Mayor Sam Liccardo’s plan highlights some of the difficulties in mandating insurance for gun owners. Not only because of opposition from gun rights advocates, but also because the insurance industry has typically offered narrow liability coverage for shootings.

The coverage that does exist tends to apply to accidents and an industry expert says that there’s been little interest among insurers in covering intentional acts of gun violence.

“I haven’t seen any groundswell among insurers to offer that kind of a product," James Lynch, chief actuary and vice president of research and education at the Insurance Information Institute, told Route Fifty.

“You can require someone to buy insurance, but you can’t require an insurance company to sell the product," he added.

But at least one law professor sees a path where state regulators—though not necessarily cities—could push the insurance industry toward providing expanded coverage for shootings.

That said, past proposals similar to Liccardo’s at the state and federal level haven’t gone anywhere.

Liccardo envisions a requirement for liability insurance that would cover accidental shooting incidents, as well as intentional acts by people who steal or borrow a gun from a gun owner. “Intentional conduct” by the policyholder would not be covered.

“Under current Supreme Court rulings, the Second Amendment to the U.S. Constitution protects the right to keep and bear arms,” Liccardo said in a statement. “However, the Constitution does not require taxpayers to subsidize that individual choice.”

Liccardo noted that with car insurance, the insurance industry encourages and rewards safe driving behavior. And he pointed out that tobacco is taxed to discourage risky behavior and to help offset the public health costs of smoking-related illnesses and deaths. 

“These successful public health models inspire a similar ‘harm reduction’ approach for firearms,” he said.

Text for the legislation the mayor is proposing is expected to be released on Thursday, according to a city official.

The draft ordinance calls for mandating the insurance requirements for city residents.

But if approved by the City Council, the requirements would not be implemented right away. Instead, the proposal would direct city staff to explore the specifics of how the requirements might be implemented and to come back to the council with recommendations.

Liccardo’s measure would also call on staff to look into establishing a fee that gun owners could pay as an alternative to carrying the required insurance coverage, or in the event the coverage is not available. Fee proceeds would go toward helping to cover public costs tied to gun violence, like emergency medical services.

The proposed ordinance would also direct city staff to examine the possibility of a ballot measure that would ask voters to decide on imposing a tax on firearms and ammunition.

Two children from San Jose were among three people killed by a gunman in July at a festival in Gilroy, California. A funeral for the youngest, 6-year-old Stephen Romero, was held on Monday.

Since the Gilroy shooting, a gunman killed 22 people at a Walmart in El Paso, Texas and another shooter killed nine people in an entertainment district in Dayton, Ohio—two separate mass shooting incidents over one weekend.  

The nation’s latest mass shootings have prompted new calls for lawmakers to take action to curb gun violence. In 2017, 39,773 people died in the U.S. from firearm-related injuries, according to the Centers for Disease Control and Prevention.

Of those deaths, 23,854 were recorded as suicides, 14,542 as homicides and 486 as accidental.

A National Rifle Association spokesperson in an emailed statement bashed Liccardo’s plan.

“Criminals are already ignoring California’s more-than 800 gun laws, so it’s doubtful many would rush out and get liability insurance. But, even if they did, liability insurance won’t cover criminal acts,” the group said. “This proposal amounts to nothing but another tax on law-abiding gun owners.”

The NRA previously affiliated itself with insurers who offered liability insurance geared toward people who legally owned firearms, including those who fired their weapons in self-defense. But these policies repeatedly ran into problems with state regulators.

Lynch explains that most gun owners who have homeowners insurance, or certain "umbrella" liability policies, generally have coverage that will apply in the event of an accidental shooting. 

Even here, though, there are some caveats. For instance, some policies may not cover an incident where a relative living in a home where a gun is kept is the one who is shot. Lynch says the limits even when the policies do pay out tend to be in the six-figure range.

But when it comes to liability insurance that covers criminal acts and intentional shootings it’s a different story. Companies don't offer it as a matter of policy and in some cases are forbidden from doing so by law.

“They don’t want to insure illegal acts,” Lynch said.

“If you were to take your car and crash it into a wall on purpose, we wouldn’t be covering that either," he added.

Around 2013, in the wake of the shooting the year prior at Sandy Hook Elementary School in Connecticut that claimed the lives of 26 people, including 20 children, lawmakers in at least a half-dozen states introduced legislation to mandate gun liability insurance.

These states included California, Connecticut, Hawaii, Maryland, Massachusetts and New York. But as far as Lynch knows, no state to date has enacted a policy along these lines. 

U.S. Rep. Carolyn Maloney, a New York Democrat, has floated a similar bill in Congress. But it too has failed to gain serious momentum.

Peter Kochenburger, a specialist in insurance and consumer law at the University of Connecticut School of Law, has asserted that states could fashion insurance frameworks to cover firearm violence.

He has suggested that states would likely have the legal authority to mandate that liability insurers cover intentional shootings. And he has pushed back on the notion that insurance never covers illegal acts or situations involving intentional harm.

Kochenburger pointed out in a 2014 article on the topic that personal auto insurance policies typically don’t exclude injury or property damage claims that occur when people are driving drunk. 

Similarly, he notes that courts have held that "innocent insureds," like spouses, are entitled to insurance coverage in cases where their partner intentionally sets fire to a home or other property.

States cannot force insurers to sell a specific line of insurance.

But Kochenburger subscribes to the idea that regulators could potentially tie requirements for covering intentional harm caused by a gun to homeowners or renters insurance policies—markets that insurers would be reluctant to back out of, especially in bigger states.

He says there's greater uncertainty over what, if any, power cities have under various state laws to compel insurers to offer certain types of coverage, even if they can enact legislation that requires their local residents to carry the policies.

“Insurance mandates typically come from the state,” he said.

Another issue he brought up—one that the NRA noted in their opposition to the San Jose proposal—is that people who commit an intentional shooting may not be likely to carry insurance coverage.

As for whether homeowner or umbrella policies would apply in situations where borrowed or stolen guns are used in shootings, Lynch said that this can depend on the circumstances and noted that related issues came up in court in the wake of the Sandy Hook shootings.

Kochenburger also said that it could depend. But he said it's likely that in situations where the policyholder is not involved in the shooting, but is accused of storing a gun negligently, the policy would likely kick in. "I think that would be covered," he added.

He also said that Liccardo, with his proposal, is talking about using insurance in a fairly traditional way, which would protect policyholders from financial consequences, compensate victims, and use risk-based pricing for rates as a way to incentivize safe behavior.

“Insurance really could, in theory," he said, "provide some significant benefits.” But a problem, he added, is that as it stands, existing policies would not cover most shootings.