There are two major functions proposed for gun insurance by American Empire advocates of such:
- Displace the costs of gun violence onto gun owners (to simplify this tract, here I am putting aside offsetting benefits of guns)
- Force gun confiscation/gun restrictions on certain individuals who cannot pay, or for whom insurance underwriters and gun salesman would not vouch
The fundamental problem is there is not enough financial burden significantly to alter the current system in most of the AE, where gun ownership is so widely distributed. Furthermore, since many companies have armed personnel on staff, those costs also will be rolled in, so the cost redistribution function severely is compromised. (Of course, one could force some arbitrary bump or multiple above that, but in that case you are taxing guns out of people’s hands, not a proportionate insurance proposal as such.) The best we can say for this is it will take guns out of poor people’s hands, but half their guns already are banned by local authorities and they still have them, so…
The first component of that financial burden, is to understand the all-in cost of gun violence. Consider that, every year, gun violence kills 18,000 people in the AE, and that there are 82,000 bullet-associated injuries per year. Again to simplify (this is an obvious lie), let us assume all of these injuries and deaths don’t involve gang member crossfire, non-hunting or other mostly easily avoidable causes, etc. but are criminals on innocents.
Consider that each lost human life and the prosecution etc. associated is $10.5M. Maybe an underestimate or over, depending on whether you consider death penalty as option, value of lost life (I consider the latter high and death penalty as an option, you might put it more if you were doing life in prison.) Consider that each injury costs $2.5M all in (this is an underestimate in some cases but a gross overestimate in others).
These figures would yield economic loss of $394 billion dollars/year. This number is unlikely to be sane since USA GDP is on the order of $20 trillion dollars, and we are talking about the very small percentage of the labor force involved in this. But using this kind of inflated number is helpful in this case to illustrate the non-viability of the insurance proposal.
Since we consider there are roughly 100M guns in the USA, this would yield insurance premium of $3,940 per gun per year. An expensive hobby no doubt, but some people annually pay this much for football games. Not to mention the costs of ammo, time spent hunting…and it’s not actually that crazy. This certainly is beyond the means of the poor people who need the guns most for protection, but upper middle class and rich people who want guns can have them. As for private security forces, it’s a significant additional cost, but if you need armed people you’re already in for much, much more than this in total compensation. Furthermore, if your life really is in danger (e.g. battered wife) you aren’t going to balk at a cost like this. The people who really care are the ones with old guns lying around rusting, those guns will be removed (but it’s stupid for them to hold onto those guns anyway, they should sell them and invest the cash).
Hence as other analysts also have indicated, your primary effect is going to be taking guns from poor and middle class people, while the rich get to have their private bodyguards and gold-inlaid pistols. There are, however, other issues which undermine the insurance concept.
In an insurance construct, you usually are responsible for the problems caused by your car/machinery etc. So if your gun gets stolen, that’s what your insurance is paying out for. The problem is that without other measures, you still will have the population of smuggled/stolen/”sold” guns circulating amongst the criminal class which commits most of the crimes. Insurance premiums aren’t being paid on those guns. Over time, that buffer of unregistered/uninsured guns causing damage will form an uncompensated cost wedge where damage is being done, but premiums aren’t being collected.
That wedge, along with the cost of corporate security (paid for by everyone when they buy goods and services), winds up socializing a large portion of the gun-related costs (which they are today, anyway). Furthermore, this corporate security (along with police gun insurance) winds up putting a floor under the insurance market, meaning that even if the number of guns in the country not held by these entities significantly decreases, the insurance premium load isn’t going to increase to the level to achieve the desired confiscation approach. So this type of approach tends to result in pretty marginal gains relative to more aggressive approaches like outright confiscation and bans.
Since it routinely is raised, we should discuss the concept of “private insurance” and risk-adjustment. The concept some gun insurance advocates want to see applied is differential premiums and coverage denials in the gun insurance market. The point being the insurance companies and gun salesmen will decide who is a “good” gun owner and who a bad, hence achieving a back-door confiscation from undesirables. This clearly is suboptimal to the objective of gun control, since insurance companies also have the option to maximize profits instead of minimizing risk. Hence, they can choose to sell to shadier customers who are willing to pay heavy premiums, and profit from the risk arbitrage or lawsuit settlement premium by fighting everything in court, including valuation of the person’s life, culpability for being shot, and even advocating for the death penalty for their customers to avoid paying life in prison costs. Meanwhile, if they only are held responsible for the crimes committed with their customers’ guns (no full apportionment) – a requirement for this type of risk scoring actually to induce preferential confiscation – the premiums involved will be dramatically reduced, so as with the flat-rate model, the rich, upper middle class, and even middle class won’t be paying enough to give up gun ownership (although they may divest excess weaponry).