States Blocking “Self-Defense Insurance” And What To Do About It

Perhaps you have been following the drama or if this all sounds new to you, I'm going to outline what is happening with states blocking self-defense insurance providers like the USCCA and CCW Safe and give you some ideas of what you can do about it should you live in one of those states. The primary people affected by this drama so far are residents of New Jersey, New York, and Washington but other states could be added to this shortlist in the near future.

A quick disclaimer: As the President of ConcealedCarry.com I have had the privilege of working with many of the companies in the self-defense insurance space. I have strong business and now personal relationships with many people who work at these organizations. Among other business interests, maintaining a relationship is necessary to ensure our coverage comparison chart is always fully updated. Lastly please note that this competing marketplace includes several players but for the sake of simplicity and given that the legal action taken by states has primarily been targeted against the NRA, USCCA, and CCW Safe; I'll be referring to them primarily.

First some background info:

The NRA Ruined It For Everyone

The “Self-Defense Insurance” market was a thriving marketplace that existed under the radar of regulators and state bureaucrats until 2017. In the spring of that year, the NRA decided to enter that marketplace by rolling out their “Carry Guard” product in direct competition to existing providers.

Since the NRA is the biggest face of the gun rights movement; and ultimately the biggest organization targeted by the anti-gun movement; the Carry Guard program quickly fell under scrutiny by the NRA's greatest enemies.

New York and New Jersey quickly found their own legal justification to give the Carry Guard program the boot (more details on that below) and of course in discovering there were other similar products kicked them all out of the state at the same time.

I shouldn't fully blame the NRA for ruining it for everyone since those states were likely to catch on eventually but given the timeline, it sure is easy to see the NRA as hurting the situation here.

Since then the NRA has killed its Carry Guard program. It was dependent on an underwriter and insurance provider, Lockton Affinity, and was forced to pay 8 Million dollars in fines to New Jersey and New York combined. Without a backer; and frankly, since their program wasn't very competitive; they shut it down leaving the existing providers to deal with the consequences.

What Exactly Is the Legal Justification By These States?

There are slight variances from NJ to NY to WA, but roughly from my research, there seem to be 2 core arguments via which these states are claiming that these companies are in violation of their laws. In some cases, both arguments are being made and in other cases only one or the other.

First, The company promoting an insurance product in the state is not licensed to promote or sell insurance in that state.

This was the first argument levied against the NRA as NJ said the NRA was promoting and advertising the product but the NRA was not licensed as an insurance provider. Their backer; Lockton Affinity who was licensed wasn't the one doing the advertising and promoting. Apparently (I'm no regulatory expert) that is illegal.

Similarly, the USCCA, which lists its members as beneficiaries on an insurance policy, ran into this issue. The USCCA's insurance backer, which is as of recent years now basically owned by the same people as the USCCA, is a separate entity and while it may or may not be licensed to sell insurance in these states; it isn't the company promoting the product and taking money from the customer.

For a time this seemed to protect organizations like CCW Safe since their business model is set up differently. CCW Safe doesn't provide insurance to its members. Members just pay to be part of a membership and if there is a “claim” CCW Safe pays it out of a holding account of cash. CCW Safe has a separate entity known as a “Captive Insurance” company that insures CCW Safe – NOT it's members. As I noted, for a time this protected CCW Safe since the individual member who lives in NJ, for example, wasn't listed on a policy as a beneficiary in any way whereas in contrast, USCCA members are.

More on how CCW Safe was impacted regardless in a few moments…

Second, The company selling the product was offering “insurance products that encourage the improper use of firearms.”

On the surface, you probably find that laughable. I know, and if you are reading this you probably know also, that these companies in no way encourage the improper use of firearms. On the contrary, most of them actively preach gun safety principles and industry best practices. However, to understand the actual legal challenge you have to look deeper.

New York regulators, for example, say no insurer can provide criminal defense coverage for a person charged with a crime involving a firearm. Of course, last I checked one is supposed to be presumed innocent until proven guilty beyond reasonable doubt but you see how this is a little more complicated.

After all, these providers promote their product specifically to be there to cover you should you be charged with a crime. Inherently the product exists for those who are tentatively considered criminals by the state. I'm not siding with these regulators or justifying their actions. I'm just saying that fighting this legal battle is more complex than just confirming that one doesn't “encourage the improper use of firearms.”

Even If The Legal Justification is Bogus… It Doesn't Matter (At Least Not In The Short Term)

It is my opinion that CCW Safe is very clearly not in violation of any of the things for which they are being accused by these states however it really doesn't matter in the short term because of the power that state regulators have.

If the state THINKS you are in violation they can fine you. And those fines can come fast and ugly and add up if you continue to not comply. What happens is companies like the USCCA or CCW Safe end up pulling out of the state and terminating their membership with residents of that state simply because not doing so would become so expensive so as to put them out of business.

Ultimately the smart business decision and the one that is most likely to benefit us as the consumers is to pull out of the state and comply with their demands and then as time and resources allow, fight the fight to be able to reenter that state and do business there once again.

I'm not privy to the dollar figures of the fines that have been slapped against these companies but it seems to have been significant.

What Should You Do If You Live in One of These 3 States?

I recently was told by someone that though they live in New Jersey they have signed up as a member of one of these organizations that don't do business there. They did this by using an out of state address belonging to a relative. I wouldn't encourage this.

By doing so you are opening yourself up to a denial of coverage should something happen. If, for example, the USCCA states it won't cover residents of NJ and yet you live there and make a claim do you think the USCCA is going to risk their entire business' existence and longevity by covering your claim even though you entered under false pretense?

I doubt they will.

So far as I can tell if you live in NJ, NY, WA, or the next state that gives these guys the boot here are some options for you to consider:

1. Contact your state representatives and let them know how you feel about what is happening. This may not have any immediate impact but it can't hurt and doing so is part of being a good citizen.
2. There are still some competitors who will accept members from some of these states. US Law Shield, for example, will take members in NJ and Washington. US Law Shield as I understand does register with each state where they do business as an insurance company that sells insurance. While the biggest players may be currently barred from these states there are a few alternatives. Click here to check our chart. On this chart about halfway down look at the row titled “Available Nationwide?”
3. Do your best without it. While I feel strongly that having a membership with one of these companies is a good use of money; if you are unable to do so you can still do everything in your power to minimize your risk. Here are a shortlist of considerations and I'll add that even if you are a member of one of these organizations all of these ideas are still good ones:
   1. Know your law really well and obey it as far as possible. Don't trust that lecture you heard from your firearm instructor. That was a good start but it isn't enough. Complete Andrew Branca's Level 1 Core Class, and then also his state-specific supplement. Then:
   2. Find and meet with a local trusted and competent attorney. You don't need to pay a retainer but having a name and a phone number to an attorney that you have previously vetted and trust is going to be a HUGE asset in a legal battle to come. Click here for our guide on how to search for and find an attorney.

I promise that ConcealedCarry.com will continue to follow this drama as it evolves and do our best to keep you informed. If you have any questions or have a comment leave it below and I'll try to respond as I'm able.

If you are at all interested in learning more about or joining any of the companies in this industry I STRONGLY urge you to start by looking at our coverage chart by clicking here.