Our View: New car insurance rules make sense 

Wausau Daily Herald
March 15, 2009

It will strike some as strange that Gov. Jim Doyle has included in his budget a provision upping the mandatory minimum coverage Wisconsin motorists must have on their car insurance.

It likely seems even more strange that Doyle should propose mandatory minimums in a state that doesn't even mandate insurance.

Doyle at least has a defense to the first concern: Car insurance coverage has a very real impact on the state's budget -- and on everyone else's budget as well.

That's why we think Doyle's proposal deserves some support -- with modifications.

Here's the connection:

As of now, motorists in Wisconsin -- those who have insurance -- are required to carry at least $25,000 in liability coverage, up to a maximum of $50,000 per crash. Those limits were established in 1982 and haven't been adjusted since.

The problem with those limits is that $25,000 doesn't buy much health care today. According to the Wisconsin Association for Justice, a group of attorneys lobbying in favor of Doyle's proposal, medical costs have more than quadrupled over the past 27 years.

If that $25,000 from 1982 limit were adjusted for medical inflation, the minimum mandatory coverage today would be $104,850, the group says.

So what happens if you're in a crash with a driver who has only the minimum coverage? You're the innocent victim of someone who runs a red light, creams your car and causes you $50,000 in injuries. You miss work for a couple of weeks, costing you a substantial portion of your salary, and you're in excruciating pain for the first few days after the crash.

Who pays for all that if the other driver's insurance isn't adequate?

Well, if you have health insurance, ideally it will cover your care. That, in turn, drives up the premiums that you and your employer pay for that coverage.

If you don't have health care coverage, you might have to pay out of your own pocket.

And if you don't have insurance or $50,000? You could end up on BadgerCare, with your bills being paid by taxpayers.

That's the connection between the state budget and car insurance.

It makes sense. But there are some concerns about solely adopting higher minimum mandatory limits of $100,000 per person for injuries up to a maximum of $300,000 per crash, as Doyle has proposed.

The primary one is cost. Whether the higher limits would cost the average driver a few bucks a year, as the lawyers' group says, or $30 or $40 a year, as insurance organizations have estimated, premiums will go up if the minimums are adopted.

And that perversely might cause even bigger problems if drivers who are struggling to make ends meet drop their insurance altogether when rates increase.

That's why we believe Doyle's minimums should only be adopted in concert with a provision requiring all drivers in the state to carry insurance.

On Tuesday, state Sen. Tim Carpenter, a Milwaukee Democrat, introduced a budget provision calling for just that. Carpenter says he recently surveyed his constituents and 92 percent favored mandatory coverage. And according to insurance trade groups, about 15 percent of all drivers in the state are without insurance, meaning that if you're in a crash, there's a one in seven chance the person who hits you will not have coverage.

As of now, Wisconsin and New Hampshire are the only states that don't mandate insurance. And if you've ever been in a crash with an uninsured motorist, you know what a dreadful experience it can be.

If someone blows through a stop sign, totals your car and injures you, you and your employer shouldn't be the ones paying the bills. The guy who blew the stop sign and his insurance company should.

It's a matter of personal responsibility.

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