Vargas: A call for mandatory liability insurance on firearms

In the wake of yet another mass shooting, this time in Gilroy, Californians are justifiably outraged. Our children are being murdered, and yet our government in Washington has proven unequal to this challenge, while our neighbor, Nevada, has undermined our gun control policies with their grotesquely lax ones.

Evidence from around the globe demonstrates incontrovertibly that this is preventable violence, and it is a sad and disgusting display of cowardice that our elected leaders in Washington choose to do nothing about it. But there is still something we can do here in California, and that is take care of victims and their families. Victims and their families should not be on the hook for tens or even hundreds of thousands of dollars in medical bills simply because they were the victims of an act of terror. That is why we need to require that gun owners carry mandatory liability insurance policies that cover third parties.

In the early 1900s, automobiles were exceptionally dangerous, lacking many of the safety features included in today’s models. A car accident almost always resulted in serious injury, but the injured parties had almost no access to compensation. This presented a dilemma for policymakers. Cars were becoming essential to daily life in America, but they are dangerous machines that often injured innocent people.

Between the 1920s and 1950s states answered this challenge by passing compulsory insurance laws, mandating that drivers carry minimum insurance policies in order to compensate people for injuries resulting from car accidents. Stated another way, policymakers balanced the necessity of cars with a public policy of protecting innocent pedestrians and passengers by mandating liability insurance coverage to protect them.

The same should hold true for guns. Guns are inherently dangerous, just like cars. As we see time and time again, even the most skilled handlers of guns can have mishaps, just like the most careful drivers will occasionally get into accidents. Of course, not all injuries caused by guns are accidents, and the same is true for cars. Sometimes it’s an act of violence, and gun violence in this country is expensive. According to the Giffords Law Center to End Gun Violence, gun violence costs the American economy about $229 billion each year, including $8.6 billion in direct expenses.

Just as with early car accidents, the costs of gun violence are born almost exclusively by victims and taxpayers. The families of victims are often required to set up GoFundMe accounts to pay for the costs of medical and funeral bills. This is manifestly unfair and unjust. If there is a public policy interest in shifting the costs of car accidents onto car owners in order to compensate innocent victims, then the same should hold true for gun owners. Gun owners should be required to have a minimum liability insurance policy in order to own a gun.

These laws are not new. Many states have considered requiring gun owners to carry liability insurance over the past decade, including California in 2013. Unfortunately, Phil Ting’s AB 231 passed the California Legislature only after the liability insurance language was stripped out of the bill. The U.S. Congress considered a similar bill in 2015, to no avail. More recently, a bill was introduced in New York late last year mandating that gun owners carry $1 million in personal injury insurance coverage. These bills need to become law.

Predictably, these bills have sparked heated protest. Liberal critics have labeled “stand your ground” insurance policies as “murder insurance.” But a stand your ground policy is different since it pays out to the shooter, not the victim. The liability insurance policies discussed here would compensate victims just like auto policies that cover third party injury.

The murderers would still go to jail. Conservative critics challenge them as an unconstitutional burden on the Second Amendment. It’s dubious to suggest that a nominal insurance premium is a substantial burden on the right to own a gun. Assuming for the sake of argument that it is a substantial burden on an actual right, then the nominal cost is more than justified by the compelling state interest in compensating the victims of gun violence.

There are also good economic reasons for mandating liability insurance policies on guns. Currently, the majority of gun violence costs are being externalized by gun manufacturers and gun owners onto taxpayers in the form of unpaid medical bills, damage to public property, emergency services, etc., a situation that should be deeply troubling to tax-conscious economic conservatives.

Shifting the burden entirely back onto gun manufacturers and owners in the form of a tax is equally problematic. If the cost of gun violence were evenly distributed across all gun owners in the United States, each gun owner would pay an average of $20,000 per year.

Are we willing to impose a $20,000 tax on gun purchases? Probably not. Mandatory gun insurance policies would minimize the costs per gun owner while also protecting taxpayers. A mandatory gun insurance policy premium would cost significantly less than a tax, but in the aggregate would create a pool of money large enough to compensate victims and their families. Thus, gun owners and economic conservatives alike should welcome mandatory gun insurance as a fair and cost effective way of relieving taxpayers of an unjust burden.

This raises an important question: why should the cost of gun violence be shifted to gun owners? The answer is simple. Gun owners, like car owners, are the ones who control these dangerous instruments. A gun owner’s negligence in keeping or operating their weapon can have deadly consequences. In nearly every major school shooting in the past decade, the guns used were taken from the shooter’s parents or family members. A person who negligently allows their guns to fall into the hands of children should be liable for the results. Responsible gun owners will end up paying a cost for these irresponsible ones, just like responsible car owners end up paying for the irresponsible ones. That’s the cost you pay for owning and operating an inherently dangerous instrument.

It’s fair to acknowledge the manifest unfairness of this situation even though it is justified by policy considerations, and the Legislature should consider methods of more fairly distributing the costs away from responsible gun owners. One such method might be to impose insurance on a per weapon basis, rather than per owner. This way a person who owns only a single handgun for self-defense in their home or owns one rifle for hunting would pay only one nominal premium. On the other hand, a person who owns an arsenal would pay a premium for each weapon.

Again, this is similar to how insurance works for cars. Insurance companies could also provide cost savings for responsible behavior, such as owning a gun safe, which would have the effect of both encouraging responsible behavior and minimizing costs for responsible owners.

At this point, we need to address the unequal burdens this may create among certain classes of gun owners. Farmers, many of whom would be hard pressed to bear additional costs such as a small insurance premium, use guns safely and responsibly as a tool for protecting crops and property from wildlife and may own many weapons.

This could be addressed as an exception for certain extremely low risk weapons being purchased by bona fide farmers (similar to how drivers license requirements are relaxed for teenagers who can show they need to drive at age 15 because of farming needs). Many gun owners also own guns that qualify as “antiques” and keep them as family heirlooms.

Given that these guns are also extremely low risk, in part because they are often single shot and in part because they may not even work, an exception might also be appropriate for these weapons (similar to how a car that is not operational can be unregistered). At the very least, either situation would presumably result in an extremely low premium because of the extremely low or even nonexistent risk of injury by these weapons.

Now you may be asking, what about illegally owned guns? This is a valid observation. Someone who illegally owns a gun is probably not going to be paying for insurance on it. Thus, any injuries caused by an illegally owned weapon won’t be compensated by insurance. This proposal has no solution to that problem. Rather this proposal is targeted at gun violence perpetrated by legally purchased weapons. Because of the ease with which people can legally purchase weapons in certain states, the guns used in mass shootings are often legally obtained.

For example, the gun used in the Gilroy Garlic Festival shooting was legally purchased in Nevada. This proposal won’t compensate all victims of gun violence, but because of the ease of legally purchasing guns in this country, it will compensate many of them, particularly those who are victims of tragic and deeply traumatizing mass shootings.

I am under no illusion that this proposal will end gun violence in America, and I also recognize that this proposal will come too late to help the families of Gilroy. But it will help many other families in the future. It is simply unconscionable that victims and taxpayers end up paying the costs for gun violence.

Good public policy demands that we shift the burden of these costs to those who control the instruments (i.e. the guns) of gun violence. Good economic policy demands that we spread the costs among them, so that the costs are born fairly and evenly. It took almost 30 years for every state to adopt mandatory liability insurance for automobiles, and it may take just as long for equally widespread coverage for firearms.

Let’s start that movement here in California. We can ensure compensation for victims and their families here in California, and look forward to the day that nationwide legislation will protect all Americans.

Michael Vargas is a business and securities lawyer and a part-time professor at Santa Clara University Law School. Vargas also chairs the American Bar Association’s committee on Business Law Education and serves on the executive board of the Santa Clara County Democratic Party, and on the boards of BAYMEC and the Rainbow Chamber of Commerce.

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