There’s some room for variation on a police officer’s belt. Their service weapon. Maybe OS spray or a Taser. Cuffs, ammo, a flashlight. What else should they carry? Cato’s Clark Neily says liability insurance.
The total payout for injuries caused by NYPD officers in 2017 was an unprecedented $308.2 million (up from a “mere” $92.4 million in 2007, and $152 million in 2012). That money didn’t come out of the pockets of the officers responsible for the misconduct; the bills were covered by you, the taxpayer.
That’s because police departments nearly always pick up the tab for damages caused by the officers they employ.
Clark looks to the intersection of law and economics for a solution.
Fortunately, there is a better policy that is more fair to taxpayers — and has the substantial side benefit of creating strong incentives for police to avoid hurting innocent people.
Like police, doctors have a difficult and stressful job that sometimes involves making life-or-death decisions under conditions of uncertainty. But unlike police, doctors don’t expect the rest of us to pay for their mistakes. Instead, doctors carry professional liability insurance, which pays to defend them against malpractice claims and protects them from financial ruin by paying out damage awards to successful plaintiffs.
The analogy of docs to cops is a bit strained. Police are public employees. Physicians, generally, are not. Policing is an occupation. Doctors are professionals. But the analogy also carries some weight.
Insurance companies are exceptionally good at identifying risk. Think about car insurance. The more accidents or speeding tickets a driver has had, the higher their premiums will be. The same is true for teenagers, who tend to get in more wrecks than adults and therefore represent a greater risk to the insurance company.
Instead of spreading those risks among all of their policyholders, insurance companies charge risky drivers more while giving a break to their safest drivers, who pay less.
The reason insurance companies are good at fixing risk is that it costs them money. They hate paying out money. Their existence relies on them charging more money than they pay out. If you’re the person who’s going to cost them money, they don’t want you. But more to the point, insurance companies will impose restrictions to limit their losses, and if you’re too risky, they won’t insure you.
Unfortunately, police departments have a hard time getting rid of their own bad apples: For example, the officers who tried to frame Wiggins are still employed by the NYPD; no charges have been filed against them.
But insurance companies have powerful incentives to identify the greatest risks — whether drivers, doctors or cops — and charge them accordingly. If cops had to carry insurance, the worst offenders would quickly be identified and charged higher rates. If they failed to clean up their act, they would eventually become uninsurable and thus unemployable.
Of course, that’s true for auto insurance, but not so for health insurance, where the government has put a finger on the scales to shift the relative burdens. Community ratings are imposed, which spreads cost without regard to risk. Healthy or sick, you’re charged the same. Even pre-existing illness or disability gets covered, despite the fact that it’s no longer insurance but a transfer payment.
Would it work for cops?
One objection is that police are already doing a difficult and dangerous job for relatively low pay, and it would be unfair to saddle them with the additional cost of insuring themselves.
No problem. We can take that pot of taxpayer money currently being used to pay damage awards for misbehaving cops — $308 million in payouts last year divided by 34,000 uniformed NYPD officers equals nearly $10,000 per cop — and use it to give them an insurance allowance.
When very-high-risk officers see premiums go up, they would have to pay the difference out of their own pockets. That’s fair.
It’s almost as if police unions would allow this to happen, if the out-of-pocket cost for individual cop insurance in excess of the allowance wasn’t used to justify a demand for a salary increase or a perpetually higher allowance.
Private liability insurance provides an extremely powerful tool for distinguishing between the best and the worst cops. The time has come to use it.
It may well be a powerful tool for distinguishing between good and bad apples, if one considers the good cops the ones who don’t pull the trigger but stand there and watch, then lie to cover their brother-in-blue’s bad choice. But would it work? Would a cop forsake the First Rule of Policing to save on his insurance premium? Are economic incentives the way to break the rhythm of bad cops?
*Tuesday Talk rules apply.