Governor Walker Misstates the New Law on Auto Insurance Coverage
MADISON, Wis. - Governor Walker's press release regarding 2011 Act 14 stated that underinsured motorist coverage, which is required coverage now, would remain mandatory under the new law. "That is inaccurate," said Mike End, President of the Wisconsin Association for Justice (WAJ).
End said, "Under the new law underinsured motorist coverage (UIM) will no longer be a mandatory coverage. The new law only requires that insurance companies offer the coverage to consumers. This is a giant step backward."
Besides eliminating the mandatory coverage, the new law removes the definition of UIM coverage in the statutes - which now applies when a negligent driver doesn't have enough insurance to cover your injuries and bills - and allows each insurance company to define the coverage. It also allows insurance companies to reduce UIM coverage by the amount of liability insurance carried by the driver who caused the collision.
End explained, "The new law may result in people not understanding the possible reductions in coverage they think they are buying. This change allows insurance companies to define the coverage so that if the other driver had $100,000 in liability coverage and you had $100,000 in UIM coverage, you would recover nothing from your UIM policy."
"The new legislation can lead to a financially disastrous outcome for consumers who do not get the coverage they thought they were purchasing, either as a result of a reducing clause or because of the definition of UIM," said End.
"Purchasers of auto insurance should not be lulled into thinking everyone is required to have UIM coverage. Review your policy with an insurance agent to make sure you have the coverage you need," concluded End.
The Wisconsin Association for Justice stands with consumers to promote a fair and effective justice system for every citizen, not just the privileged and wealthy.