How to pay for the costs of gun violence? Gun Insurance!?

February 6th, 2013

Some states are considering bills that would force gun-owners to purchase insurance before buying, or even owning a grandfathered gun! Bills in California  Connecticut, New York, Maryland, Pennsylvania, and other states would do just that.

Said an Assemblyman from San Francisco:

“There’s basically a cost that is born by the taxpayers when accidents occur. … I don’t think that taxpayers should be footing those bills.”

Ting equated the idea to requiring vehicle owners to buy auto insurance. Gomez said it would encourage gun owners to take firearms safety classes and keep their guns locked up to get lower insurance rates.

Some proposals would require buyers to show proof of insurance before they could purchase a weapon. The proposal in California would apply to anyone owning a weapon, Ting said, though the bill’s details are still being worked out.

This discussion of the social costs of gun violence is interesting. Who should internalize the costs? Generally, it is the taxpayers who internalize the cost of all crime–theft, rape, etc. I’m not sure why this crime–gun violence–should be treated much differently. We don’t make people purchase rape insurance–indeed that would seem to be a strong moral hazard. I mean, can you generally insure against a crime you commit? I don’t think so.

Though, what really concerns me is how such policies would be issued. What if an insurance company refuses to insure someone? Would that mean such a person could not own a gun? What if the state regulatory regime makes it very difficult for private insurers to offer insurance? Would there be guaranteed issue and community rating where no one could be denied an insurance policy due to pre-existing conditions? You know, we will eventually need a firearm insurance individual mandate to prevent the cost-shifting and free-riding of people who do not obtain insurance. We know that’s constitutional now (I am only being partly facetious here).

Of course, there are also the constitutional issues of whether such onerous policies could place a burden on the exercise of the right. Especially if these policies can be denied based on concerns that are stricter than those which the state could deny access to firearms. Say Geico denies someone firearm insurance because they have bad credit–that is a ground on which the state could not deny someone a policy. What are the constitutional implications there?