New Insights Article: Guns, Insurance, and the Ethos of Private Protection

Tue, 09/05/2017 - 10:59
by Joseph S. Harrington

“There is only one person responsible for my happiness, safety, and security,” says Tim Schmidt, founder and president of the United States Concealed Carry Association (USCCA), an organization devoted to training and supporting individuals who carry firearms for self-defense, “and that one person is me.”

Thinking along this line has driven enactment in recent years of Stand Your Ground laws in several states. These statutes reduce or eliminate the traditional common law duty that an individual who is assaulted or threatened in public must seek to retreat before resorting to the use of force in self-defense.

In a report on the impact of Stand Your Ground laws, researchers from Georgia State University stated that proponents of Stand Your Ground laws “contend that law-abiding citizens must be able to protect themselves from intruders and attackers without having to worry about criminal or civil penalties before taking action in self-defense.”1

Not everyone agrees, however, and substantial disagreement exists around the implications of Stand Your Ground laws for public safety. For example, a November 2016 report in the Journal of the American Medical Association concluded that “the implementation of Florida’s stand your ground self-defense law [in 2006] was associated with a significant increase in homicides and homicides by firearm, but no change in rates of suicide or suicide by firearm.”2

There is a similar divide over the public safety implications of the vastly expanded number of Americans who have licenses, available now in every state, to carry concealed firearms.

The Crime Prevention Research Center (CPRC), an organization that supports gun rights, reported in 2015 that the nation’s murder rate had fallen about 25 percent—from 5.6 victims to 4.2 per 100,000 people—during the preceding seven-year period, while the number of concealed-carry permit holders nearly tripled from 4.6 to 12.8 million.3

The Violence Policy Center (VPC), which favors restrictions on guns, disputes the impact of privately owned firearms in suppressing crime and reported in 2016 that there had been at least 849 killings not in self-defense by concealed-carry permit holders over the same period cited by the CPRC. Given the lack of comprehensive reporting on fatalities by concealed-carry permit holders, the VPC believes the sum “most likely represents a small fraction of the actual total.”4

Insurance Implications

So what does this have to do with insurance?

Readers may recall that, in the wake of the mass shooting in Newtown, Connecticut, several states considered legislative proposals to mandate liability insurance at high limits for people owning firearms.

The proposals essentially went nowhere, for the simple reason that liability insurance as traditionally understood can only cover the accidental injuries that arise from firearms—and accidental firearms injuries are actually quite rare in the United States.

Of the roughly 30,000 firearms fatalities in the U.S. each year, well less than 1,000 are accidental. Similarly, only a small fraction of nonfatal firearms injuries are accidental, and many of them are to the person handling the gun.

In all, firearms account for far fewer accidental deaths and injuries than autos and household hazards. So, while many insurers have introduced product, pricing, and underwriting measures to address dogs, trampolines, swimming pools, and other common liability exposures, firearms accidents have rarely received such attention, given their low frequency of occurrence.

In light of mass shootings, personal umbrella carriers now commonly ask how many guns are owned by an insured household and whether those weapons are secured. Adverse underwriting or pricing action is rare, however, as it is recognized that some law-abiding households like to collect guns but are nonetheless good personal lines accounts.


To read the entire article and receive CE for CPCUs credits, visit The Institutes CPCU Society Knowledge Center.

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