The New Year is already looking up for Wisconsin drivers! By January 1, 2010, all of the provisions of the Truth in Auto Insurance law will be in effect - holding auto insurance providers accountable once again.
The New Year is already looking up for Wisconsin drivers! By January 1, 2010, all of the provisions of the Truth in Auto Insurance law will be in effect - holding auto insurance providers accountable once again.
In 1995 the Wisconsin insurance industry had successfully initiated unprecedented legislative protections for insurance companies; insulating themselves from many legitimate claims and allowing them to advertise a given policy, collect premiums for stated coverage, declare the policy limits on the first page of the policy, but then strip away many of the stated benefits in the fine print that followed.
The "Truth in Auto Insurance" statute returns Wisconsin law to a standard that requires insurance companies to play it straight with consumers and provide the coverage they bargained for. It also brings Wisconsin auto insurance law into the mainstream of American culture, by requiring that all drivers be insured and that the amount of their coverage be reasonable. Under the old law, propagated by the insurance industry, responsible drivers were left with little recourse if they were injured by an uninsured driver. Responsible drivers had to insure themselves for not only the damage that they might cause to others, but also for damages that the uninsured may cause to them. This statute is a victory for honesty and responsibility.
Signed into law by Governor Jim Doyle in June 2009, the Truth in Auto Insurance law is seen by many as a huge step forward in protecting consumer interests. It introduces several major modifications to current insurance company practices, including:
The minimum insurance liability coverage requirements for car accidents increase. The previous minimums, in place since 1982, were outdated and no longer reflected modern health care costs or damage repair expenses. Changes include a minimum of $50,000 for the injury or death of one person - up from $25,000 - and $15,000 for property damage - up from $10,000.
In almost all cases, minimum insurance coverage concerning uninsured (UM) and underinsured motorists (UIM) will rise to at least $100,000 per person and $300,000 per accident.
Insurance companies will no longer be allowed to cleverly insert reducing clauses in the fine print of their policies to reduce or eliminate their exposure for losses they had collected premiums to cover. For example, say that you are paying for $100,000 in UM/UIM motorist coverage and your spouse is hit and seriously injured by an underinsured driver, whose liability insurance is only $50,000. In the past, even though you paid for $100,000 in additional protection, your insurance company might have inserted a "reducing clause" into your policy that permitted it to subtract the $50,000 collected from the underinsured driver from your underinsured motorist policy - awarding your spouse only $50,000, less than the amount of coverage you thought you bargained for, even though her damages far exceeded that amount. Under the new law, if you're paying for it, and your damages are great enough, you're entitled to it. So, your spouse would receive both the $50,000 from the other driver's insurance and the full $100,000 from your own. That's a change that is just being honest.
If you are paying for multiple insurance policies, you will have access to all that apply in the event of an accident. Uninsured/underinsured motorist coverage is personal and portable. That means you are covered wherever you may be; in your car, a passenger in someone else's car or even walking down the street. Since 1995, insurance companies were permitted to sell multiple UM/UIM policies and collect additional premiums from you for each overlapping policy; but then insert "anti-stacking" language in the fine print of your policy that allowed them to only pay one limit, even though multiples were purchased. Now, if your first policy does not completely cover the damage incurred, you will be able to utilize up to three of the policies you have been paying for. Insurance companies have always been "stacking" premiums and will continue to do so; but now the law requires them to once again stack coverage as well, when the damages so require.
In a hit-and-run accident, the physical "hit" requirement is removed. Suppose that you are run off of the road, or into another vehicle, but not actually hit by the negligent driver. In the past, your UM insurer was able to insert "contact" language in your policy, requiring physical contact between the negligent driver's car and your own in order to bring a claim against the UM policy. In the past, insurance companies would not pay non-contact claims regardless of how overwhelming the evidences was, whether there were witnesses, or even videotape. No contact meant no recovery. This saved the insurance industry a great deal of money because it was able to avoid paying anything on these losses, even though its customers reasonably believed they had purchased protection. This also punished skillful drivers who were able to avoid a bad driver, but still got hurt. This contact rule has been modified. You will now be able to claim uninsured motorist coverage even if you successfully avoided contact with the negligent driver; but you must, however, be able to provide independent witnesses to the accident.
Finally, the new law requires Wisconsin drivers to carry at least the new state minimums in vehicle liability insurance; meaning that, in an accident, the driver at fault will be held responsible. This reduces the burden of responsibility from falling on innocent parties and victims. Compliance and enforcement will remain as challenges, but at least the law now makes sense and eventually, it is expected to greatly reduce uninsured drivers from our streets.
The major theme of Wisconsin's Truth in Auto Insurance law seems to be: "If you're paying for it, you're entitled to it." The new law was not welcomed by many of the car insurance providers in the state. The insurance industry fought hard to block these changes and is already targeting legislators in an attempt to return our law to their control. But at least for now, Wisconsin Insurance Law makes a lot more sense. This new statute makes strides for honesty towards consumers and responsibility for drivers. These are values most Wisconsin citizens embrace; so we already have something to be happy about in 2010!
