The Constitutionality of Mandating Firearm Insurance

February 21st, 2013

The Times reports on a growing movement in some states to require gun owners to purchase some form of liability insurance.

Lawmakers in at least half a dozen states, including California, Connecticut, Maryland, Massachusetts, New York and Pennsylvania, have proposed legislation this year that would require gun owners to buy liability insurance — much as car owners are required to buy auto insurance. Doing so would give a financial incentive for safe behavior, they hope, as people with less dangerous weapons or safety locks could qualify for lower rates.

But what is the purpose of these policies? To actually insure against liability that may result from the gun, or make it more difficult to obtain a firearm? My guess is that such policies won’t do much to solve the problem of the former, but will be quite good at enabling the latter.

One representative from Massachusetts confirms my concerns.

“I believe that if we get the private sector and insurance companies involved in gun safety, we can help prevent a number of gun tragedies every year,” said David P. Linsky, a Democratic state representative in Massachusetts who wants to require gun owners to buy insurance, which he believes will encourage more responsible behavior and therefore reduce accidental shootings. “Insurance companies are very good at evaluating risk factors and setting their premiums appropriately.”

His focus is not on insuring against tragedies (which the policies won’t do). His focus is on making it more expensive. Higher premiums will deter people from owning firearms. In effect, if a policy is too expensive, a person who otherwise who legally has the right to own a firearm won’t be able to own a firearm

I have previously blogged about the implications of requiring firearm insurance.

First, I’m not sure what this liability insurance policy would even cover. The policies today seem to cover the costs of self-defense shootings, but no intentional shootings.

The United States Concealed Carry Association recently began selling what it calls “Self-Defense Shield.” “If you’re forced to justifiably use your gun in self-defense,” its Web sitesays, “Self-Defense SHIELD will help pay for your expert pro-2nd Amendment lawyer by reimbursing your legal-defense expenses following your acquittal − an ingenious system critical to the arsenal of any responsibly armed citizen.”

Premiums for such insurance range from around $200 to $300 per year; in general, the coverage is narrowly written and excludes cases where a gun is used to commit a crime.

Any policy that covers intentional shootings would create strong moral hazards.

The insurance industry is wary of some of the proposals to require gun owners to buy liability coverage — and particularly of bills, like one that was filed in New York, that would require coverage for damages resulting not only from negligence but also from “willful acts.”

Robert P. Hartwig, the president of the Insurance Information Institute, said that insurance generally covered accidents and unintentional acts — not intentional or illegal ones. “Insurance will cover you if your home burns down in an electrical fire, but it will not cover you if you burn down your own house, and you cannot insure yourself for arson,” he said.

Christopher J. Monge, an insurance agent and gun owner in Verona, Wis., recently wrote a book, “The Gun Owner’s Guide to Insurance for Concealed Carry and Self-Defense,” which he sells at gun shows. Mr. Monge said that the problem with most liability insurance is that it promises coverage only in cases of a gun owner’s negligence, or an accidental shooting — and not if the gun owner shoots someone intentionally in self-defense. “A negligent act is covered by your liability policy, but if you intentionally shoot somebody, it could be excluded,” he said.

In other words, the policies would not cover the mass shootings, like Newtown or Aurora.

In any event, if a person is intent on killing someone else with a gun, an insurance policy would not serve as any deterrent.

Relatedly, would it cover the harm if someone steals your gun, such as in the Newtown shooting?

But I think the most important question is whether a private insurance company could price a person out of the exercise of a constitutional right. How would these premiums be set?

Could the insurance companies consider factors such as credit history and indebtedness (factors I’m sure that an actuarial would be interested in). If so, poor people would be priced out of owning a gun.

Could the insurance companies consider the crime-rate of the neighborhood where a person lives–charging higher rates for living in high crime areas? If so, people (again likely those poor) who live in the most dangerous areas, and have the most need for a legally acquired firearm, would be priced out of owning one.

Could an insurance company place limitations on how you can use your gun? For example, you must keep it at home, disassembled, and locked up in a safe. In other words, before issuing a policy, the homeowner must promise to keep the firearm inoperative (this was the restriction at issue in D.C. v. Heller). Or, what if an insurance company says ou cannot carry it outside the home?

All of these questions raise an important issue. If the exercise of a constitutional right is premised on obtaining an insurance policy, and an insurance company can limit that right (either through charging an outrageous premium, or denying the policy outright), what recourse does a would-be firearm owner have? I think there are serious constitutional implications here.

With insurance regulations, the state can restrict the right to bear arms through the back door. Or, perhaps more indirectly, the insurance company can severely limit how a person can exercise the right.

Generally, progressives are very distrustful of private insurance companies. Indeed, a key aspect of the Affordable Care Act was prohibiting insurance companies from denying policies, based on pre-existing conditions (guaranteed issue), and charging different rates to people in the same area (community rating). I quipped before that perhaps a firearm insurance mandate would be one way to solve this collective action problem.

My former professor, Nelson Lund, seems to have proposed a form of firearm insurance policy back in 1987.

The current debate over mandatory liability laws is being watched with interest by Nelson Lund, the Patrick Henry Professor of Constitutional Law and the Second Amendment at George Mason University School of Law. Mr. Lund proposed the idea of mandatory insurance in a 1987 article in the Alabama Law Review , seeing it as a form of gun control that could be consistent with the constitutional right to bear arms. But Mr. Lund said that he had not studied any of the current proposals, and noted that it made a great deal of difference how they are written.

“If this were done, the private insurance market would quickly and efficiently make it prohibitively expensive for people with a record of irresponsible ownership of guns to possess them legally,” he wrote in the 1987 article, “but would not impose unreasonable burdens on those who have the self-discipline to exercise their liberty in a responsible fashion.”

Nelson’s article, written two decades before the Court’s Second Amendment jurisprudence, may be a bit outdated. A constitutional right should not be subject to the same regulatory interests of other insurance matters.

I wonder where these proposals will go. The insurance lobby will love it. As we saw with the Affordable Care Act, the lobby loves laws that force people to buy insurance.