damnum absque injuria

July 11, 2009

Concealed Carry Insurance

Filed under:   by Xrlq @ 9:00 am

Via Sebastian, fellow insurance professional Caleb argues that concealed carry insurance is a waste of money, as it is (1) written on by Lloyds of London, a nonadmitted carrier, and (2) largely overlaps with the liability coverage offered under most homeowners policies. I don’t understand the former objection, frankly, but I think Caleb may be understating the latter. Most homeowners, condo and even renters policies don’t just cover acts of negligence in the home, but anywhere, unless they are on business or while driving an automobile. So if you are even thinking of purchasing this coverage, call your insurance agent or broker first. Send him a copy of the policy in question, and ask him if it covers a damned thing that isn’t already covered by the policy – and if not, how much it would cost to increase the coverage under your existing policy to make up the difference.

Then again, one question to ask of ANY insurance policy available only on a surplus lines basis is, if this is such a good idea, why aren’t any admitted carriers offering it in my state? If the answer is because you are Jennifer Lopez, and there’s only one ass of yours in the world for any actuary to price and any insurance company to allegedly cover, that’s a pretty good reason. But CCW is ubiquitous, so you’d think if there really were a significant, unmet need for CCW risks, some specialty carrier in the U.S. would be offering it by now. On the other hand, if it’s really a worthless policy that insures nothing, then admitted carriers who answer to local regulators have a great reason not to touch it. If all the CCW coverage does is obviate the need to make a claim on your homeowners policy, and maybe help keep that premium a little lower than if you made the claim (though query whether this will make your HO policy enough lower to offset the premium for the CCW policy), that’s not a very good reason to buy a redundant coverage. In fact, the policy doesn’t even appear to do that. The “other insurance” clause of Section VI(B) provides that:

If other valid and collectible insurance with any other insurer is available to an “insured” covering a claim or suit also covered by this policy, the insurance afforded by this policy shall be in excess of and shall not contribute with such other insurance. Notwithstanding any Other Insurance provision contained in any other insurance available to any “insured”, Section VI – CONDITIONS, B ‐ Other Insurance of this policy is controlling, and we shall not make any payments under the insurance afforded by this policy until the limits of liability of any “insured’s” other insurance have been exhausted. Subject to the preceding, the insurance afforded by this policy is in excess of and shall not contribute with any other insurance which has been specifically contracted for by that “insured” or under any policy in which that “insured” is a Named or an Additional Insured.
Nothing herein shall be construed to make this policy subject to the terms, conditions and limitations of any other insurance policies.

Yes, you read the “notwithstanding” clause right. Cut out the standard industry jargon, and you’re left with a clause that basically says this:

If your homeowners or umbrella policy already covers the risks covered by this policy, and its coverage limits are high enough to satisfy the claim, then congratulations on your purchase of this CCW -policy; you’ve just bought nothing. In fact, you’ve bought worse than nothing if that other policy also has an “other insurance,” clause, which nearly all policies do. What you’ve bought is the spectacle of two insurance companies pointing their fingers at the other saying “I don’t have to pay this claim, the other guy does!”

On the off chance you are the rare bird who can get any real coverage under this policy, Section 4 (medical payments) has an interesting limitation, namely it only covers medical payments to “a person on or in the ‘residence premises’ with the permission of an ‘insured’” or “lawfully on or in the ‘insured location’ if the incident occurs there. In other words, if you improperly shoot a trespasser in imperfect self-defense, no coverage for you. Off the premises, it only offers coverage “if the ‘bodily injury’ arises out of the legal use of a
firearm by the ‘Named Insured.'” If they find that you violated a law in using the firearm, however innocently, no coverage for you. Yeah, sounds like a great deal – for Lloyds of London and the brokers hawking the product. For you? YMMV.

Full disclosure: I am not an insurance agent or broker, but do work for an insurance company that does not write CCW insurance, homeowners insurance, or any other line of insurance likely to compete with CCW insurance. My opinions are mine and mine alone.

2 Responses to “Concealed Carry Insurance”

  1. Snowflakes in Hell » Blog Archive » I Have to Agree With Caleb Says:

    […] UPDATE: Xlrq has more on the topic here. […]

  2. Carla @ Best Health Insurance Companies Says:

    I agree with Caleb, it is a waste of money.

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