Could owning a gun affect how much you pay for homeowners insurance?

Consumer Reports News: January 16, 2013 09:08 AM

Gun safety in the home hasn't been discussed much in the recent national conversation on gun violence, but the head of the nation's largest homeowners and auto insurance company acknowledges that it could be.

Edward B. Rust Jr., CEO and chairman of the board of State Farm Mutual Insurance Co., said this week that gun ownership "could be among a multitude of things" considered among the risk factors used by insurance companies to determine the cost of homeowners insurance policies. "But," he added, "whether someone owns a gun doesn't necessarily make them a risk. . . . The bigger debate is, Are people competent in gun ownership?"

Rust made his comments following a panel discussion at a forum for property and casualty insurers held at the Waldorf-Astoria hotel in New York on Monday.

In recent weeks, some commentators have suggested that insurance could play a role in mitigating gun violence. Insurers could offer discounts for gun owners who indicated they use gun locks and other safety features, suggests Marsha N. Cohen, a law professor at the University of California Hastings College of the Law. Another option: Consumers would have to show proof of coverage before buying guns.

Accidents represent just 2.6 percent of all gun fatalities, according to the Centers for Disease Control and Prevention. But that figure rose by 37 percent, from 1.9 percent, from 2010 to 2011.

State Farm does not specifically ask applicants whether they own firearms, says Jeff McCollum, a company spokesman. In most states, the company's standard homeowners policy covers up to $2,500 of loss if guns are stolen or destroyed. Owners of expensive collectible guns can buy a separate "personal articles policy" for the value of what they own.

State Farm does not give special discounts for people who use gun locks and other safety devices, McCollum said. The company sells policies in every state and has 20 to 25 percent of the homeowners and auto insurance market. (Check our buying guide and Ratings for homeowners insurance.)

Rust seemed reluctant to insert himself or the industry in the gun-violence debate. He acknowledged that "compliance and safety" had to be part of people's thinking about guns. But, he said, while there was a need for a "healthy debate" on the subject, insurers weren't geared up to police policyholders on whether they're taking proper gun-safety measures in the home. "It's like seat belt laws," he said. "Wearing a seat belt can mitigate injuries. But we can't pull everyone over to make sure they're wearing a belt."

Tobie Stanger

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