San Jose passes firearm insurance ordinance

The San Jose City Council has voted to require gun owners have insurance coverage for their weapons.

The ordinance needs to be approved at a final reading next month, and already various gun rights organizations have threatened to sue if the ordinance becomes law. If approved the ordinance would take effect in August.

The ordinance cites several statistics concerning gun violence, including homicides, suicides, and unintentional shootings. It states that one-third of shootings are unintentional, and these shootings are insurable. It references auto insurers rewarding good drivers and incentivizing the use of airbags and other safety features.

The ordinance states that similar to these actions for auto insurance, carriers could encourage firearm owners to take safety classes, use gun safes and implement other safety measures to keep firearms under control. Liability insurance could reduce the number of gun incidents by encouraging safe behavior and providing coverage for losses and damages related to some incidents. Programs and services to gun owners and their households could also be beneficial by encouraging safe behavior, educating gun owners and providing resources to residents.

The ordinance contains two definitions, “firearm” and “designated nonprofit organization”. Firearm is defined as a device designed to be used as a weapon from which a projectile is expelled through a barrel by force of explosion or other combustion. This does not include antique firearms as defined by  18 U.S.C. Section 921(a).

According to the ordinance, a designated nonprofit organization is defined as an entity that qualifies as a nonprofit according to the federal internal revenue code and is designated as such under the City Manager’s authority under Section 10.32.235. City officials and employees may not sit on the board of directors of the designated nonprofit.

Next is the insurance requirement; an individual living within the city who owns or possesses a firearm is required to have and maintain a homeowners, renters or gun liability insurance policy that specifically covers “losses or damages resulting from any negligent or accidental use of the firearm, including but not limited to death, injury or property damage.” An individual is considered to be the owner of a lost or stolen firearm until the theft is reported to the police or sheriff’s department, depending on who has jurisdiction.

The individual is required to obtain insurance coverage within 30 days of the effective date of the ordinance, or a later date if one is established in the regulations. Also, those owning or possessing a firearm in the city will be required to pay an Annual Gun Harm Reduction Fee to the designated nonprofit organization every year. Currently, the fee is proposed to be $25. The regulations will establish the date upon which this is to be paid, and the fee will be set forth in the schedules of fees established by resolution of the City Council. Funds received by the designated nonprofit organization will be used to provide services to firearms owners or household members. These services may include suicide prevention services or programs, violence reduction or domestic violence services or programs, mental health services related to gun violence or firearm safety training and education. The City will not specifically direct how the funds will be handled, and no funds will be used for litigation, political advocacy or lobbying activities.

A few exceptions are listed, for peace officers, those licensed to have a concealed weapon per the California Penal Code § 26150 or § 26155, and those eligible to proceed without paying court fees and costs according to California Government Code § 68632 (a) and (b).

Firearms owners will be required to complete a form attesting to the fact that they have the required insurance, and include the name of the insurer and policy number and they are to keep the signed attestation form with the firearms where they are stored or when they are transported. Proof of payment of the required fee is required to be attached to the attestation form.

The city manager is given authority to promulgate all necessary regulations to implement and enforce the ordinance, including designation of the nonprofit that will receive the fees, establish procedures and forms related to the insurance requirement, and publish the regulations on the website.

Violations of ordinance will be punishable by an administrative citation per the administrative code, including fines, right to appeal and right to an administrative hearing. Fines will be established by the city council. Also, the firearms of someone not in compliance with the ordinance may be impounded.

The city manager is authorized to charge and collect any cost recovery fees associated with fulfilling the policies, and fees will be established by the City Council. The ordinance will become effective 180 days after its adoption. If any part of the ordinance is found to be unlawful, unenforceable or void, that does not have any bearing on the rest of the ordinance.

Insurance coverages

The ordinance requires insurance that specifically covers “losses or damages resulting from any negligent or accidental use of the Firearm, including but not limited to death, injury or property damage.” So where is such coverage available? The standard homeowners policy HO 00 03 only specifically mentions firearms in the special limits for theft of the property; it does not specifically mention firearms in the liability section of the policy.

There are two portions of the liability part of the policy that could apply. The first is coverage for claims for injury or damage for “occurrences” for which the insured is legally liable, and medical payments for injury that occurs because of activities of an insured. Whether an insured is legally liable for an accident could be an issue, however under medical payments would provide coverage for activities of an insured, barring any exclusions. While there is not an exclusion for accidental injury, there is an exclusion for expected or intentional bodily injury or harm. However, there is also an exception. Such acts are excluded, except for injury or harm that results from “the use of reasonable force by an “insured” to protect persons or property.” This provides for some coverage, but does not fulfill the requirement of the ordinance. The ordinance requires insurance that specifically provides coverage for negligent or accidental use of the firearm. Since the policy isn’t worded that way, if we take the ordinance at its word, the standard policy would not be sufficient. So where is a firearm owner to get such a policy?

The United States Concealed Carry Association provides a policy for its members, but again that is designed for when an insured has fired his weapon in self-defense. The National Rifle Association also has a policy that provides coverage for true accidents, although the NRA has run afoul of some insurance departments over the sale of said policy. U.S Law Shield is another provider of coverage in certain states, and coverage is provided for use of a weapon, including just showing it. Details on these policies can be found here.

There may be other policies as well, and the standard carriers may, in time, develop more specific coverages for firearms.

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