The Economic Case For Gun Liability Insurance

One proposal bouncing around the US House of Representatives to help curb gun violence is The Firearm Risk Protection Act, a law that would require gun owners to purchase liability insurance for their weapon, or pay a penalty. The federal legislation, put forth by Rep. Carolyn Maloney (D-NY) with seven co-sponsors, is obviously controversial; gun owners are reluctant to take on the additional cost burden, and see it as an impingement on their Second Amendment rights. Lawmakers have considered similar efforts in California, Massachusetts, Maryland, and Connecticut, and all have elicited controversy or been withdrawn.

But whether or not it sits well with the American people, gun liability insurance has its economic merits. University of Michigan economics and public policy professor Justin Wolfers recently made the case for gun insurance. As he sees it, people don’t count unintentional crime committed by their firearm into their calculations when considering purchasing a firearm. “When people fail to consider the broader social costs of choices like buying a gun,” Wolfers explained, “they’re more likely to do them, and society suffers”:

Another even more powerful approach is to recognize that the problem isn’t guns per se, but gun violence. Thus, instead of taxing guns, we should tax gun violence. Basically, this is the same as saying that we should make gun owners liable for any damage their guns do. Not only would this discourage some people from buying guns, it would lead those who do keep guns to be more careful with how they’re stored. Indeed, greater care would surely have kept Adam Lanza out of his mother’s cache. The problem, though, is that Nancy Lanza is neither with us to pay the damages her gun caused, nor could she afford to pay for the enormous damage her gun wrought in Newtown. And so the only way this solution works is if guns required mandatory liability insurance, much as we force car owners to buy insurance for the damage their machines wreak.

It’s the sort of careful solution that would enable people who enjoy hunting to continue with their passions, but also push them to take the sorts of precautions that we all wish the Lanza household had taken. If the gun lobby were smart, and if they really are interested in being socially responsible while keeping their weapons, they would be pushing hard for this sort of policy.


NPR has a round-up of other economists who have weighed in, including Cornell economics professor Robert Frank compared it to car insurance, pointing out that, “Nothing in the Constitution grants people the right to expose others to serious risk without compensation.”

McCarthy’s proposal would impose a $10,000 fine on anyone who refused to get insurance.

An insurance program for firearms would help shift the cost of gun violence onto gun owners and away from all other taxpayers and victims. Right now, taxpayers — be it those who responsibly own gun, those who recklessly do, or those who have never even touched a firearm — take on the financial burden of guns: violent crimes are estimated to cost taxpayers $3.7 billion every year. A part of the reason for that is because low-income people, who often lack even basic health insurance, are the ones being killed by guns. Even the more affluent can suffocate under the piling debt of hospital bills, opting for bankruptcy. And when victims of gun violence die, their families must then scrape up the cash to pay for a funeral, compensate for the lost income, and continue on with their lives.