Critics blast bill to reduce auto insurance requirements

Republicans want to cut mandatory levels in Wisconsin

By TODD RICHMOND
The Associated Press
January 20, 2011

MADISON — A Republican plan to scale back mandatory car insurance levels would make driving in Wisconsin riskier and leave injured motorists holding the bag, the proposal's critics said Wednesday.

The GOP has introduced a bill that would essentially repeal provisions in the state budget that laid out minimum coverage levels for liability, underinsured motorists and uninsured motorists and replace them with lower standards.

Republicans say the public didn't get a chance to sound off on the mandates. They also argue the minimums are too high and have driven insurers to raise premiums, forcing people to forego insurance.

But Democrats and their allies complained at a hearing before the Senate and Assembly insurance committees reduced coverage levels would deprive injured drivers of money they need to recover, and no hard evidence shows the budget mandates have contributed to higher premiums.

"We're probably spending more on this hearing than this (the minimum standards) costs us," Rep. David Cullen, D-Milwaukee, a member of the Assembly insurance committee, said.

Democrats included provisions in the 2009-2011 budget that made car insurance mandatory in Wisconsin. It also laid out minimum coverage levels for liability and underinsured and uninsured motorists. State regulators and the insurance industry say the provisions have led to higher premiums.

Car insurance would remain mandatory under the bill. But minimum levels would drop, sometimes by tens of thousands of dollars in some categories. For example, current liability minimums of $50,000 for injuring or killing one person, $100,000 for injuring or killing two people and $15,000 for property damage would drop to $25,000, $50,000 and $10,000.
Coverage for medical payments would remain voluntary but decrease, too.

Before the hearing, Citizen Action of Wisconsin, a coalition of organizations including the trial attorneys group Wisconsin Association of Justice, Planned Parenthood and labor unions, held a news conference to blast the bill.

The coalition's program director, Robert Kraig, insisted nothing shows the budget has led to higher premiums and the bill is really an attempt to keep insurance companies from paying out. And Ann Jacobs, a member of the trial group, questioned how Republicans could expect someone to swear an oath within 30 days of a serious crash, asking if the GOP expected victims to sign the document from their hospital beds with pens clenched between their teeth.

Daniel Plumb of Milwaukee told reporters his 69-year-old father, Carroll, was severely injured last summer in a motorcycle crash in Sheboygan County. Without the stacking provision, his medical bills likely would have bankrupted him, Daniel Plumb said.

"To change this would have destroyed him," Plumb said.

Rep. John Nygren, R-Marinette, one of the bill's authors, told the committees people should be allowed to choose coverage they can afford. He said the public never got a chance to digest the changes because they were tucked deep in the state budget.

The bill is designed to give consumers "the ability to choose and put affordability back into the equation," Nygren said. "The government with a swoop of its pen ... slipped this into the budget without consumers having a say."

The committees weren't expected to immediately vote on the bill.

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