Would a gun liability insurance requirement reduce gun violence in North Carolina
and ensure compensation for victims of gun violence? Specifically, how would a liability
insurance requirement for concealed carry permit holders reduce gun violence and provide
compensation for shooting victims?
Problem (p. 3)
Gun violence in the United States has declined in the last 20 years, but is still
unacceptably high. In 2011 alone, over 32,000 people died as a result of firearms.
That same year, over 3,500 North Carolinians were injured or killed in gun-related
assaults and accidents.
In response to the tragic events at Newtown, Connecticut, that resulted in the death
of twenty children and six school personnel, several proposals were introduced in
legislatures across the nation to curb gun violence. Among them was the proposal
to require gun owners to purchase gun liability insurance.
To date, nine states have considered mandatory gun liability insurance legislation.
The primary goal of such legislation is to compensate victims of gun violence. Financial
compensation for harm done is a well-established principle of our insurance law system.
For decades, lawmakers have required drivers in their states to purchase automobile
insurance to provide compensation for any damage or bodily injury their vehicles may
cause. Gun liability insurance would work in a similar fashion.
Firearms, even in the hands of responsible and law-abiding gun owners, increase the
risk of serious injury to others. An insurance mandate for firearms would help shift
the economic costs of gun violence away from victims and taxpayers and onto those
who possess firearms. Currently, some victims of gun violence have access to monetary
compensation, such as the tort system, victims compensation programs, homeowners insurance,
automobile insurance, and National Rifle Association (NRA) sponsored insurance. However,
these programs are inadequate, as some do not cover intentional acts of gun violence
while others provide minimal and insufficient compensation. In any event, in most
cases, there is no compensation because the shooter is unknown, or if known, is judgment
A secondary goal of a gun liability insurance mandate would be to reduce gun violence.
By requiring gun owners to purchase liability insurance for their firearms, some high-risk
people may be deterred from possessing an arsenal of dangerous weapons.
Alternatives (p. 18)
Lawmakers must consider the following policy options when considering a gun liability
• Should the mandate cover injuries and deaths resulting from (1) unintentional shootings
only or (2) intentional and unintentional shootings?
• Should the mandate apply to (1) concealed carry permit holders only or (2) to all
gun owners in North Carolina?
• Should the mandate apply to (1) new firearms purchased after the mandate is enacted
or (2) to all firearms?
Criteria (p. 21)
• Cost-Benefit Analysis (Maximize compensation for victims and reduce gun violence,
and minimize costs to insurers and gun owners)
• Maximize Political Feasibility
• Ensure Constitutionality
Analysis (p. 22)
The analysis seeks to balance compensation for victims and costs, political feasibility,
and constitutionality of each policy option. All policy options will likely be deemed
constitutional since neither of the alternatives restricts an individual’s right to
possess a firearm for lawful purposes.
• Alternative 1: Should the mandate cover injuries and deaths resulting from (1) unintentional
shootings only or (2) intentional and unintentional shootings?
In 2011, there were six times as many assaults as there were accidental shootings.
The 20 unintentional firearm deaths accounted for only 1.1 percent of all manners
and methods of violent death in North Carolina, whereas the 519 homicides accounted
for nearly 29 percent. Thus, providing coverage for both intentional and unintentional
shootings would maximize compensation for victims and would be most likely to reduce
gun violence. Although the costs to insurers and gun owners would be higher under
this option, they are likely to be small in comparison to the value of lives saved
and the value of compensating innocent people injured by the misuse of firearms.
A mandate that covers injuries and deaths resulting from intentional injuries is not
going to be popular among insurers and lawmakers. Insurance companies have vocally
opposed any scheme that would provide coverage for intentional acts. Insurers fear
that insuring intentional acts would give individuals an incentive to commit violent
acts. However, because it is unlikely that a shooter would use his own resources
to compensate a victim, insuring intentional acts would not raise a moral hazard problem.
• Alternative 2: Should the mandate apply to (1) concealed carry permit holders only
or (2) to all gun owners in North Carolina?
By the end of 2011, there were more than 240,000 concealed carry permit holders in
North Carolina. Although the precise number of gun owners in North Carolina is unknown,
estimates indicate that, at a minimum, North Carolina has about 1.2 million gun owners.
Evidence also suggests that a significant number of gun-related assaults are committed
by gun owners who do not possess a concealed carry permit. Although a mandate that
applies to all gun owners would provide coverage for a greater number of gun violence
victims, the costs of providing coverage to all gun owners would be higher than providing
coverage for concealed carry permit holders alone. Since gun owners who do not possess
a concealed carry permit commit a greater number of weapons-related assaults, insurers
would likely have fewer claims to pay out if the mandate only applied to concealed
carry permit holders.
Concealed carry permit holders are already regulated by the state. Thus, mandating
liability insurance for concealed carry permit holders is far more feasible than mandating
insurance for all gun owners.
• Alternative 3: Should the mandate apply to (1) new firearms purchased after the
mandate is enacted or (2) to all firearms?
A significantly small portion of gun injuries and deaths would be covered if the mandate
were to apply to firearms purchased after the insurance scheme were implemented.
The costs generated by insurers and gun owners would, however, be higher if the mandate
applied to all firearms since insurance companies would be required to pay out significantly
If the mandate only applied to new purchases, fewer gun owners would be implicated.
Thus, an insurance scheme that applies to guns purchased after the date of enactment
is likely to be more feasible.
Recommendation (p. 30)
I recommend that the gun liability insurance scheme (1) cover injuries and deaths
from intentional and unintentional shootings, (2) apply to concealed carry permit
holders only, and (3) apply to all firearms, purchased before and after the date of
Moving Forward (p. 31)
Before any gun liability scheme can be implemented in North Carolina, several more
issues need to be resolved. For example, should the mandate provide compensation
for pain and suffering, or merely medical expenses and funeral costs? What factors
should insurance providers take into account when setting premiums? Should the mandate
be modeled after victims compensation programs or the tort system?