My house burned down. I lost a transferable M16 (worth $40,000) and 10 suppressors. I had them insured on my homeowners policy. The adjuster offered me $1,200 for the M16 (“It’s just an old rifle”) and $0 for the tax stamps (“Taxes aren’t property”).
Key Takeaways
- Market Value vs. Book Value: Transferable machine guns are investment assets. An adjuster using a “Blue Book” for a standard AR-15 will value your M16 at $1,000. You need Agreed Value coverage that reflects the $40k market price.
- Tax Stamps ($200) are Coverable: You must explicitly include the cost of the tax stamps in the insured value. Most standard policies exclude “taxes and fees” unless scheduled.
- The “Contraband” Scare: Adjusters often panic when they see “Machine Gun” or “Silencer.” They might flag it as illegal contraband and deny the claim. You must have your NFA trust/paperwork ready to prove legality instantly.
- Scheduling is Mandatory: Do not rely on “Blanket” coverage for NFA items. List every serial number and value individually.
The “Why” (The Trap)
The trap is “Valuation Methodology.”
Standard insurance uses “Replacement Cost” (cost to buy a new one). You cannot buy a “new” transferable machine gun (banned since 1986). Therefore, “Replacement Cost” is impossible. You need “Agreed Value” (we agree it’s worth $40k).
The Investigation (I Quoted Collectibles)
I tried to insure a $100k NFA collection.
CollectInsure / Eastern Insurance
- Valuation: Agreed Value.
- Process: I listed the M16 for $45,000. They accepted it.
- Tax Stamps: I added $200 to the value of each suppressor. They accepted it.
- Cost: ~$600/year.
State Farm
- Valuation: “We would need an appraisal.”
- Process: Difficult. Most local agents don’t understand NFA items.
Comparison Table
| Item | Standard Homeowners Value | Specialty Agreed Value |
| Transferable M16 | $1,200 (AR-15 Value) | $45,000 (Market Value) |
| Suppressor | $800 (MSRP) | $1,000 (MSRP + Tax Stamp) |
| Deductible | $1,000 | $0 |
Step-by-Step Action Plan
- Scan Your Stamps: Keep digital copies of all Form 1s and Form 4s in the cloud. If the originals burn, proving ownership to the ATF and Insurer is a nightmare.
- Get a Specialist Policy: Move NFA items off your home policy. Use a dedicated firearms insurer (Eastern, CIS, Lockton).
- Include the $200:
When declaring value, write:
“Surefire SOCOM556-RC2 ($1,100) + NFA Tax ($200) = $1,300.”- [IMAGE: Screenshot of an insurance schedule listing NFA items with tax included]
- Update Values Yearly: Machine gun values fluctuate. Update your schedule annually.
FAQ
Does the ATF insurance cover it?
No. The ATF does not insure anything.
What if it’s stolen?
Report to police AND the ATF (NFA Branch) immediately.