Consumers Win Big with Automobile Insurance Changes in State Budget
By Mark L. Thomsen
With the passage of the state budget Wisconsin’s automobile insurance rules have gotten a much needed tune up so that they will work better for consumers and ensure everyone gets what they pay for when purchasing a policy.
The changes fall into three categories; who must have insurance, how much insurance should people carry and changes that make sure your claims are paid when you need it most.
Beginning in June 2010, Wisconsin will join 48 other states in requiring all drivers to carry insurance. Current estimates are that 15% of drivers carry no insurance. In 2006 there were 8,000 accidents involving uninsured drivers. These accidents caused 78 deaths and resulted in over $35 million in unpaid medical bills. Public support for mandatory auto insurance is very strong and comes as no surprise as Wisconsin citizens are strong believers in personal responsibility.
Of course having insurance is only as good as the insurance you carry. No one would believe that carrying $100 of insurance would be sufficient to cover anything and Wisconsin has required a minimum level of insurance for many years. While this strategy is sound, it only makes sense if the minimum levels are relevant to today’s medical and property costs. 
The state budget wisely provides the first increase in minimum insurance levels since 1982. Beginning in 2010 the minimum level of liability insurance required will increase to $50,000 (for injuries to a person)/$100,000(all injuries in an accident/$15,000 (property damage). According to insurance industry sources 80% of the insured drivers already carry at least these amounts, so relatively few people will be affected by this change. As a matter of fact most agents have been recommending much higher coverage for many years.
In addition, coverage for both uninsured and underinsured motorists will also be mandatory at the $100,000 per person/$300,000 per accident level. Uninsured motorist coverage protects you if you are in an accident with a driver without insurance and underinsured motorist coverage protects you if you are in an accident with someone who does not have enough insurance to cover your injuries. Both coverages are personal and portable and cover you whether you are injured as a pedestrian, on a bike or in your car.
Finally, you need to be sure that if you are involved in an accident that you will have access to the coverage you pay for. A number of provisions in the state budget undo some exclusions that the insurance industry helped put in place in 1995 that allowed them to deny more claims, without reducing your premiums. That meant less coverage for you and more profits for them.
Confusing issues like reducing clauses, anti-stacking and a lack of standard definitions too often meant that consumers were unable to collect on policies they had paid for when they needed it most. The state budget returns common sense to the law and is a giant win for consumers.
Now some companies may attempt to use these changes in the law to try to justify rate increases. My advice to you is that if your rates go up, don’t simply blame the politicians, use your common sense – shop around. With over 150 insurance companies offering automobile insurance in Wisconsin, I’m sure you will find a better choice.

Mark L. Thomsen is the President of the Wisconsin Association for Justice, the state’s largest voluntary bar organization defending the civil justice system. 

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