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Insurance companies study risk, so why don’t they ask about guns?

Peretz Partensky

Insurance companies base their business on looking for ways to minimize risk.

For example, a life insurance company will ask you whether you scuba dive.

But there is one risk they don't calculate: insurance companies do not ask whether you own a gun.

Kristen Moore is an associate professor of Mathematics at the University of Michigan. She co-authored a piece for The Actuary Magazineexploring how the insurance industry treats the risk of firearms. 

“Actuaries use math, statistics, and finance to figure out the cost today of uncertain risky things in the future," explained Moore.

So, if you apply for health insurance, an actuary will assess your behaviors - like whether you exercise, are overweight, or engage in risky sports like rock climbing - to determine the likelihood and cost of you getting sick. 

Yet, despite the potential risks of injury and death from firearms, Moore found very little evidence that insurance companies consider gun ownership when determining the cost of coverage.

“There’s not a lot in the literature about how firearm risk compares to scuba diving or private aviation," said Moore. "To the best of my knowledge, it has not been studied.”

That doesn't mean that gun ownership is risk free. 

According to Moore's research, death rates are higher for gun owners than they are for scuba divers. In fact, Moore found that gun owners would see changes in several kinds of insurance policies, including life, health, homeowners, commercial liability, and disability, if actuaries calculated gun ownership risk. 

So why don't they? 

The answer may come down to two things: research and politics.

Not only have the effects of gun ownership on death rates not been studied, but Moore speculates including gun ownership as a factor could alienate a significant portion of an insurer's market. For decades, insurance companies neglected to ask whether individuals smoked in order to not limit policy holders. 

Although there are no policy stances in her piece, Moore suggests three questions that could guide further research on the topic:

1) How many claim dollars are paid out for gunshot wounds? 

2) What are the long-term costs of non-fatal gunshot wounds?

3) What are the mortality rates of gun owners vs. non gun owners?

Listen above for the full conversation with Kristen Moore. 

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