About four in ten households in the United States contain a firearm. Lots of people either own a gun or live in a household with someone who does. But unfortunately, even many long-time firearms owners have never taken the time to consider the insurance and liability implications of the firearm(s) in their home.
Guns are valuable and potentially dangerous objects. Because of the dual factors of value and risk, it’s critically important for both new and experienced gun owners to make sure they understand how guns and insurance go together so they can take appropriate steps to protect themselves as well as their firearms.
From an insurance perspective, a firearm is a possession. Like most relatively durable objects, the main threats to a firearm stored in a home are fire, water, wind, and thieves. Other natural “perils,” such as hail and lightning, are unlikely to be a problem for most guns (unless the lightning causes a house fire) regardless of how the guns are stored.
Besides carrying good insurance, acquiring a good gun safe can be the best step you can take to protect your firearms and other valuables.
Liberty Safe—a manufacturer headquartered in Payson, Utah—frequently publishes thank-you notes from customers whose belongings were protected from calamity.
A homeowner from Moore, Oklahoma, sent dramatic photos of what he found upon arriving “home” after an F5 tornado swept up his street. “Our home was a 3,800 sq ft house and it was completely leveled to the ground,” he wrote. “To our surprise, the Liberty safe, which was bolted to the concrete, was still sitting there.” When the family cleared away the debris, the safe opened on the first try. The guns were safe, and so were all of the important family documents and heirlooms that were stored inside.
The house was a total loss, and the exterior of Scott’s safe was charred and oxidized. It took a professional locksmith to open it, but when the door swung back the owner found his hunting rifles, his stock of ammunition, and (even more importantly) all his family’s important documents in perfect condition. Everything inside the safe had survived both the conflagration and the thousands of gallons of water required to put it out.
It goes without saying that a safe that can resist a tornado or a fire would also come in handy preventing thieves from making off with your personal property. Many people consider firearms a good investment, and investing in a good gun safe just makes good sense.
Aside from a good gun safe, the best measure you can take to ensure that your firearms are protected from perils such as fires, tornadoes, or theft is to insure them with a homeowners or renters policy.
In general, your homeowners or renters policy covers everything in your home, but there are some exceptions. Insurers understand—just as criminals do—that certain possessions tend to be targeted for thieves. When a home is burglarized, the criminals generally don’t haul away the couches, the refrigerator, and the bedside lamps. Instead, they focus on smaller items that are easy to carry and easy to liquidate: cash, coins, jewelry, fine silver … and guns. Because of this, most insurance companies put sub-limits on certain categories of possessions.
For example, a policy may cover up to $100 in cash, up to $500 for gold bullion, and up to $300 for jewelry. These limits will vary from company to company and from policy to policy. Similarly, almost all insurance companies put a sub-limit—usually between $2,000 and $3,000—on losses for guns that are stolen from a home, destroyed in a fire, or lost in some other catastrophic event.
People who own one or two firearms are usually well served by the protections in standard homeowners or renters policy. Those with more guns in their collection will need to work with an agent to purchase scheduled personal property coverage. This is a policy add-on that allows homeowners and renters to cover all items within a sub-limited category to make sure everything is protected. It’s perfect for gun owners who want to safeguard even modest collections of firearms. The cost may depend on whether you store your firearms in a gun safe, though not all insurance companies will ask.
The process of obtaining scheduled coverage is fairly simple:
If your household contains other sub-limited items such as jewelry, antiques, or art, this is the perfect time to get scheduled coverage for those collections as well. The rate you’ll pay for your scheduled personal property coverage will vary by the insurance company and will also be affected by your insurance score.
An alternative to obtaining scheduled personal property coverage along with your homeowner's insurance is to purchase separate supplemental insurance, which provides similar coverage in a separate policy. There are plenty of companies that offer supplemental insurance programs—some of them are more general policies and others are specifically for gun owners. Your insurance agent may be able to provide comparison quotes so you can see the relative costs and benefits of using scheduled coverage versus a supplemental policy.
One of the trickiest parts of putting together a schedule or supplemental policy is coming up with accurate values for each firearm in your collection. This can be a balancing act; if you overstate the values, you’ll end up paying higher premiums, but if you underestimate the value of the individual items in your collection, you may not be fully reimbursed if you lose them to theft or damage. Different insurance companies vary on the backup they’ll require for your valuations.
In many cases, though, your insurance company will rely on your own judgment to determine the value of the firearms you own. Many gun owners turn to books, and there are some good ones on the market.
The Blue Book of Gun Values and the Official Gun Digest Book of Guns & Prices are both comprehensive and accurate in their valuations. Popular websites such as FirearmsPriceGuide.com and BlueBookOfGunValues.com (the web version of the book mentioned above) can also be helpful.
If you have a gun that is particularly valuable or unusual, you may need to do some additional legwork. Online gun classifieds, auction records, and specialty publications can be helpful. If you’re really stumped, ask your agent or even the proprietor of your local gun shop to refer you to a professional firearms appraiser.
As you finalize the values that you’re scheduling, you’ll also need to choose whether to insure your firearms based on cash value or replacement cost. “Actual cash value” or “fair market value” is defined as the cost to replace an insured item with an item of similar kind and quality, less depreciation, assuming neither the buyer nor the seller are in a particular hurry to buy or sell. Replacement cost is virtually the same as cash value, without the deduction for depreciation.
Guns tend to hold their value well—often appreciating in value over the years—and with proper care, they can last for generations. Because of this, replacement cost coverage is almost always the best option, though it is a little more expensive than cash value insurance. A replacement cost policy ensures that you’ll be able to replace the various guns in your collection and that you won’t be penalized for owning a firearm for a long time. If you have to make a claim, the insurance company will pay the appraised value of the gun upfront. Then, when you replace it, you can submit receipts and your insurer will reimburse you for any difference that you have to pay for an equivalent replacement.
Your homeowners or renters policy doesn’t just protect your belongings—it also protects you from liability. If your dog bites a neighbor kid or your tree falls on the neighbor’s garage, your homeowner's insurance kicks in to help protect you … up to certain limits. Sometimes a simple homeowner's policy just isn’t enough, so many people purchase additional protection in the form of an umbrella policy.
So what about the liability involving your firearms? Consider these possibilities:
Most of these situations can be prevented by making sure that your firearms are always stored safely. But even careful gun owners can find themselves on the receiving end of a liability lawsuit related to their firearms, and even unsuccessful lawsuits can cost large amounts of money to defend.
Your homeowner's insurance likely provides a certain amount of liability coverage that would kick in if you were sued for negligence or wrongful death. Many policies provide somewhere between $300,000 and $500,000 of coverage, but you’ll need to check to determine exactly how much coverage you have and whether your insurance company has any exclusions regarding certain types of cases. An additional umbrella policy is the best way to ensure that you don’t have to pay out of pocket to defend yourself from a lawsuit related to the firearms you own.
If you have a family attorney, it’s worth having a discussion to find out how much it would cost to defend a case like the ones outlined above. You may determine that the default amount is just not enough protection.
The first priority for any gun owner should be to learn and follow the rules for the safe handling and storage of firearms. The very next task should be to sit down with an experienced insurance professional to examine the risks and liability associated with gun ownership and find the best insurance products and solutions for your needs.
Every insurance company is different, and companies may differ in how they rate the risks associated with gun ownership. To make certain you get the best coverage possible, be sure to speak with an independent insurance agent who can help you evaluate quotes from multiple companies and find the one that best suits your individual situation.
Even if you’ve already gone through the process with your insurance agent, you might consider an additional consultation every year or two to ensure that you, your family, and your firearms are covered in case of a worst-case scenario.