Insurance Company Math Deceives Consumers

“Truth in Auto Insurance ” provisions in state budget will guarantee accident victims the coverage they purchased

For years, Wisconsin drivers have purchased auto insurance to protect their families from the astronomical cost of being injured in an automobile accident. Because of little known provisions in the law, families often find out that the coverage they purchased is not what is advertised.

“Too often, drivers have found that the coverage they purchased does not add up to the coverage they receive,” said Mark Thomsen, president of the Wisconsin Association for Justice. “In many cases, insurance industry math adds up to unpaid medical costs that are shifted to Wisconsin taxpayers.”

The Wisconsin Association for Justice is highlighting the need for the Truth in Auto Insurance provisions contained in the state budget by providing real stories from Wisconsin drivers who have suffered because of a series of changes written into Wisconsin law at the request of the auto insurance lobby in 1995.

A true story from the Wausau area:

On August 7, 2008 Donald Landwehr was driving his moped about a quarter of a mile from his home when he was rear-ended by his neighbor. Mr. Landwehr suffered severe injuries to his head and body. He was hospitalized for 42 days before being transferred to a brain injury rehabilitation center in Minnesota.

Mr. Landwehr had a stint placed in his head and returned home on October 17, 2008. Because of complications stemming from his injuries, he has been in and out of the hospital since. Donald has been placed in permanent guardianship and his doctor says that it is unclear whether he will ever fully recover from his extensive injuries.

Mr. Landwehr had purchased underinsured motorist (UIM) coverage for $250,000 in the event of an unforeseen accident with an underinsured driver. His neighbor had liability coverage of $200,000. Because of what is known in the insurance industry as a “reducing clause,” Mr. Landwehr was allowed to recover only $50,000 of his UIM coverage and $250,000 total coverage even though the two drivers thought they had purchased $450,000 in coverage for an accident such as this.

INSURANCE INDUSTRY MATH – Only works for the Insurance Company

 $250,000 – amount of underinsured motorist coverage purchased by Donald Landwehr

-$200,000 – amount of liability coverage purchased by the at fault driver

   $50,000 – amount of underinsured motorist coverage actually available to Mr. Landwehr

In the end, Donald Landwehr was left with permanent head injuries. He currently resides in a nursing home while he undergoes rehab for his brain injuries.

“Too many Wisconsin drivers believe that they are doing the right thing by purchasing insurance to protect themselves and their families in the event of an accident like this,” Thomsen added. “We applaud the effort of the Governor and hope that the legislature will stand up for consumers by adopting the Truth in Auto Insurance provisions to restore fairness and honesty for Wisconsin drivers when they buy insurance,” concluded Thomsen.

For more information on the Truth in Auto Insurance provisions visit www.wisjustice.org.

For more details on this particular tragedy, contact the Wisconsin Association for Justice.

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Mark Thomsen is the President of the Wisconsin Association for Justice. 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.

 

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