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Old April 15, 2014, 03:31 PM   #1
Sharkbite
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Join Date: November 4, 2013
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Insurance for NFA items?

I just got off the phone with my ins agent. Asked about adding my coming Suppressors and SBR's to my personal items policy.

I carry extra ins on my gun collection over and above what the homeowners policy covers

I was told that because the NFA items are "owned" by a trust that i cant add them to my "personal" policy

Anybody looked into Ins for items on a trust?
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Old April 16, 2014, 03:32 PM   #2
Machineguntony
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Since no one has chimed in, I will throw in my two cents.

I would never buy insurance on guns, especially NFA items like a silencer. A machine gun...maybe.

Insurance is a negative expectation proposition, meaning it is like going into a bank, giving the bank $1, and getting back 99 cents. Insurance should generally only be purchased under three conditions: 1. it is a legal requirement (car insurance to drive); 2. it is contractually required (like homeowners insurance to get a mortgage); 3. to prevent ruination (a loss so bad that you will never recover and be able to live at your current position).

As an example, people often buy the stupid extended warranties, which is a form of insurance, on a TV because the TV is expensive and it might break. Never mind that the TV has a manufacturer's one year warranty, or that most TVs, if they have warranty defects, break within the first year of usage, but the insurance on the TV does not meet any of the above three requirements. It might be expensive if it breaks, but it will not ruin you. You are better off putting the money for the warranty into a repair or new TV fund. The extended warranty has a higher profit margin than the TV.

Same thing with gun insurance. Gun insurance is a huge rip off. These types of policies are high margin items for insurance companies.

You might think, well, if I am a victim of theft, at least I will get my money and that is worth piece of mind. True, but you are paying a premium for that piece of mind.

But to answer your question directly, assuming you still want to buy insurance on your NFA item, it is possible to find insurance. You can find a nontraditional route of insurance (for example, Lloyd's will insure anything), or you can have your current underwriter or carrier carve out a special term for you. If they won't, then you just have to shop around. You can find insurers to insure anything.

The trust would have to purchase the insurance, but you can designate yourself as a beneficiary of the policy, so in essence, you are buying insurance for yourself.

As for insuring your silencers, you should be careful. Most policies pay something similar to a market value, NOT replacement value (although you can get replacement value policies, it just costs more, and you should be sure what you are buying). The resale market on used silencers is almost nonexistent. So don't be surprised if you pay for decades worth of premiums, and then when the burglary happens, the adjuster pays you $50 on a suppressor that cost you $500 and a $200 stamp. Surprise!

I personally do not have insurance on my guns. Instead, I use the money, that I would have spent on insurance, on a nice and advanced surveillance system.

Anyways, none of the above is advice, so you really shouldn't believe anything that I've written.
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Last edited by Machineguntony; April 16, 2014 at 03:40 PM.
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Old April 16, 2014, 06:14 PM   #3
Theohazard
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I'm with Tony: I had a friend once who was a super-smart insurance actuary, and he told me never to buy insurance on something you can afford to pay for out-of-pocket. (Tony, he also used the extended warranty insurance offered for electronics as an example.)

On average, you're going to lose money on insurance. But often insurance covers things we couldn't afford to pay for out of pocket. I've paid a lot more in car insurance than I'll probably ever get back, but if something crazy happens I could end up owing more than I could ever afford. That's why insurance like that is often useful.

Like all insurance, chances are you'll save money if you don't insure your silencers, and if you can afford to buy new ones immediately if they're stolen then I can't see any good reason to insure them.
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Old April 16, 2014, 06:52 PM   #4
Brian Pfleuger
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I have to agree.

Insurance is a lot like gambling in reverse. You're basically betting that what you DON'T want to happen WILL happen and the "house" (insurance company) is betting that it WON'T happen.... although the premiums are often high enough that unless it happens very early on the company wins either way.

I would not consider adding a separate policy for items that were only a few thousand dollars at most... unless the policy was IMPOSSIBLY cheap, like $1/year or something.
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Old April 17, 2014, 05:49 AM   #5
Beretta686
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I spend about $600 a year on my insuring my substantial gun collection which includes several MGs and other NFA goodies held by a trust through USAA's valuable property program.

It may not be a good ROI, but my peace of mind knowing that whatever happens to my ~$25k M16, I won't be stuck-like-chuck is worth $600 to me. YMMV.
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Old April 17, 2014, 08:51 AM   #6
Brian Pfleuger
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"Several machine guns and NFA goodies" is a far different situation than "suppressors and SBRs".
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Old April 26, 2014, 09:00 PM   #7
medalguy
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Well, I've had an M16, 1921 Thompson, and a number of other goodies since the 1968 amnesty. If I had paid $600 a year for insurance from 1968 to today, that would be $27,600 in premium receipts I'd have in my hand instead of a couple of nice guns.
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