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Republicans in Wisconsin Seek Repeal of New Law

Certain Republicans in Wisconsin's state legislature are calling for a repeal of the state's new car insurance standards, which were signed into law by Governor Jim Doyle in June of 2009. Some of the laws have already gone into effect, and some will be enforceable as of the beginning of 2010. Republican lawmakers are upset that, among other things, the law was included in a larger state budget package and not considered on its own. They feel there was not sufficient opportunity to examine the merits of the bill by itself and study it in-depth prior to voting it into law the way it was attached to the budget bill.

What's Included in New Wisconsin Car Insurance Standards

Wisconsin's new car insurance standards were included in the state's fiscal budget package, a document totaling around 1,500 pages in length. They make the state of Wisconsin the 49th out of 50 to require auto insurance coverage for all drivers, with only New Hampshire left with no state mandated minimum requirements for coverage. New requirements for uninsured and underinsured motorist coverage went into effect on November 1, requiring auto insurance companies to include this coverage not only on new policies written after that date, but also on renewals as well. Many policy holders have already seen these changes in their policies, with more coming each month.

Uninsured motorist coverage minimums prior to the new law stood at $25,000 per person and $50,000 per accident. The new minimums are $100,000 per person and $300,000 per accident. Lawmakers sponsoring the law explained that increasing the minimums have simply brought them into line with the increased costs associated with accidents; that the old minimums were not in line with modern economics. The logic behind the increase was basically an increase to account for inflation through the years since the old minimums had been set.

The minimum levels of underinsured motorist coverage were also set at $100,000 and $300,000 under the new law. Uninsured motorist coverage protects the policy holder in the event of an accident with another driver who has no coverage, while underinsured coverage takes care of the excess costs of medical bills associated with an accident claim if the other driver has insufficient coverage to cover all expenses. Although underinsured motorist coverage was available from Wisconsin car insurance companies prior to the new mandate, there was no requirement for policy holders to carry it in any amount at all until the new law was passed.

The new Wisconsin law also includes higher minimum liability limits for state car insurance policies. Liability coverage is the portion of an auto policy that pays for property damage when the driver is at fault in an accident. Before the new legislation went into effect, the minimum coverage allowed by Wisconsin state law was $25,000 for the injury or death of one person, $50,000 for the injury or death of two people, and $10,000 for property damage. All three minimums have been increased as a result of the new law. Wisconsin auto policy holders are now legally obligated to carry at least $50,000 in coverage for the injury or death of one person, $100,000 for the injury or death of two or more people, and $15,000 for property damage liability coverage [1].

The "Truth in Auto Insurance" law brings a few other significant changes as well. It includes a ban on anti-stacking provisions, which will make it easier for residents with multiple policies to draw on them in situations where one policy does not cover all expenses associated with a claim. Reducing clauses were also outlawed; meaning the proceeds from an underinsured driver who is at fault in an auto accident cannot be reduced or subtracted from the underinsured motorist coverage of an innocent driver involved in the accident [2]. Another change was in language governing claims on hit and run accidents, changes which expand motorists' ability to make a claim even when no physical contact occurs after they are run off the road by another vehicle, leading to damage to their own car.

Why Do Republicans Want to Repeal New Insurance Law?

Many Republicans in the Wisconsin legislature are working to repeal some or all of the tenets of the so-called "Truth in Auto Insurance" law for economic reasons. They feel that the timing is wrong for such an increase, with the state suffering through economic hardships like high rates of unemployment and bankruptcy. State Senator Michael Ellis (R-Neenah) introduced a bill to repeal most of the changes brought about by the law. He went even further than most Republicans in his criticism of the "Truth in Auto Insurance" legislation, calling it a "big sloppy kiss" from Democrats in the state legislature to trial attorneys who provide financial support to their campaigns [3].

While Ellis' claim may amount to standard partisan hyperbole, the basic claim by Republicans that the increases are ill-timed is one they insist is valid. Division on the issue has not fallen perfectly along party lines, but the Republicans to this point have been unable to garner enough support from across the aisle to get a repeal passed. Since they are in the minority in the state Senate with Democrats firmly in control, a legislative repeal at this point is not likely. Still, the continuing debate over an issue that would seem to be resolved is interesting, and certainly worth keeping an eye on in the weeks and months ahead.

What's Next for Wisconsin Drivers Affected by the "Truth in Auto Insurance" Law?

The changes in Wisconsin state auto insurance standards mean higher premiums for some state residents, although many experts are downplaying the effects of the increases because many policy holders already held insurance policies containing at least the new minimum limits prior to the passage of the new law. For drivers in Wisconsin who previously had no insurance or who carried coverage at levels below the new minimum threshold, an increase is most certainly coming. Even for drivers with a perfect driving record, an increase is likely if coverage has to be adjusted, simply because the auto insurance coverage providers themselves are absorbing increased costs of coverage themselves under the provisions of the new law. It remains to be seen how much of an increase most drivers will see in their policy premiums, though much information will be coming in the months ahead as new policies are purchased and old ones come up for renewal.

Outside of political circles, many consumer advocacy experts are actually hailing the new law as a victory for motorists because the legislation does a lot to protect consumers from potential abuses. The outlawing of reducing clauses and anti-stacking provisions in particular will help ensure that auto insurance policy holders truly get the coverage they pay for, according to many experts. Regardless of opinion or political orientation, as long as the "Truth in Auto Insurance" law is on the books in Wisconsin, drivers will have to make adjustments in their insurance decisions and possibly in their expenditures to deal with the reality of these new minimum coverage limits statewide.

[1] http://www.wisconsinrapidstribune.com/article/20091129/CWS0101/911290723/1982/WRT04/New-law-forces-some-to-pay-more-for-auto-insurance Retrieved 2009-12-05.
[2] http://www.24-7pressrelease.com/press-release/budget-bill-changes-wisconsin-car-insurance-landscape-113595.php Retrieved 2009-12-05.
[3] http://www.allbusiness.com/government/elections-politics-politics-political-parties/13389554-1.html Retrieved 2009-12-05.

 

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