U.S. Insurers Resist Push to Make Gun Owners Get Coverage

U.S. insurers are resisting a push by state legislators to mandate that gun owners buy coverage tied to the weapons’ risk, saying such laws may encourage irresponsible behavior.

Requiring the policies would be impractical and could fail to limit gun violence, the American Insurance Association, a property-casualty trade group, said in an e-mailed statement.

“It could have the opposite of its intended effect,” the AIA said in a statement. The laws may lead to reckless actions by gun owners who “will not have their own assets, property or income at stake,” the group said. “It would be a sad irony if the outcome of such a mandate was more gun violence.”

Lawmakers are seeking to limit damage caused by guns after the massacre of 20 students and six educators at Sandy Hook Elementary School in Newtown, Connecticut, in December. A gun-control bill in Massachusetts would fine firearms owners who don’t purchase coverage, and a California legislator has supported a measure that he said would require the insurance. Lawmakers behind the proposals said they wouldn’t make insurers liable for damages from criminal acts.

“I’m really looking at people who are injured as a result of somebody’s negligence in the way that they store a gun or the way that they handle a gun,” Democratic state Representative David Linsky, who proposed the bill in Massachusetts, said in a phone interview. Insurers should set rates that reflect the types and number of weapons owned by a policyholder and how the guns are stored, he said.

Gun Questions

Policyholder-owned State Farm Mutual Automobile Insurance Co., the biggest seller of U.S. residential coverage, is among carriers that don’t ask about firearms in their standard homeowner’s policy application.

“State Farm does not know whether its customers own guns,” Arlene Lester, a spokeswoman for the Bloomington, Illinois-based insurer, said in an e-mail. “We would become aware that a customer owns firearms if they asked us to cover a high-value gun or collection.”

A typical homeowner’s policy will provide coverage for negligence such as an accidental gun discharge, the AIA said.

“Property and casualty insurance does not and cannot cover gun crimes,” AIA said in the statement. The group represents approximately 300 insurers that write more than $117 billion in premiums each year.

Even if states mandate that gun owners purchase liability protection, they can’t require companies to offer that coverage, said Bob Hartwig, president of the Insurance Information Institute, an industry group.

“Insurers will not insure illegal acts,” Hartwig said.

Illegal Acts

Democrat Assemblyman Phil Ting, a co-sponsor of the California legislation, said the bill wouldn’t force insurers to provide coverage for illegal or intentional acts.

The National Rifle Association, an opponent of gun-control laws that says it has more than 4 million individuals as members, offers liability coverage through Lockton Affinity LLC, an affiliate of closely held Lockton Cos. Lockton declined to comment on its underwriting practices.

The NRA’s policies range from collector’s insurance to coverage for hunting or shooting-range accidents, according to the group’s website. The NRA didn’t respond to requests for comment.

Tad Montross, chief executive officer of reinsurer General Re, a unit of Warren Buffett’s Berkshire Hathaway Inc., said in a January report, that insurers can promote the use of trigger locks and safety training.

“The insurance industry can’t change the number of guns in existence,” Montross wrote. “We can influence how they are stored and encourage training so they are used safely.”

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