Wisconsin Minimum Liability Limit Reduction Approved by Legislature

Wisconsin state capitol

The Wisconsin State Capitol building (Source: Wisconsin.gov)

The Wisconsin Assembly voted Tuesday to cut the minimum amounts of auto insurance that drivers in the state are required to carry, sending the much-debated legislation to the governor to be signed into law after alternate versions are reconciled.

Current minimums had been put into effect at the beginning of 2010 after being approved by the former Democrat-controlled state government. When Republicans took control in January, one of their first targets was the beefed-up state-required minimums.

The lead sponsor of the bill to do just that, Rep. John Nygren, called the Democrat-initiated changes “intrusive government policy that took choice away from the consumer and replaced it with larger settlements for trial attorneys.”

Lawmakers passed the measure to shrink the minimums back to pre-2010 levels spurred by arguments that the increased minimums brought with them an undue burden on state residents and restricted coverage options because of rises in premiums statewide.

Statistics quantifying the actual size of the average premium increase brought about by the change, though, vary widely. Reports on the effects of the Wisconsin auto insurance changes range from findings of across-the-board premium increases totaling less than 1 percent to claims that they had been pushed up by more than 33 percent. The state insurance commissioner has not weighed in with any objective numbers.

The approval of AB 4 means the minimum amounts of financial protection drivers must carry to cover damages they cause while driving will be cut nearly in half.

Currently, minimum policies must provide  up to $50,000 to pay for bodily injury damages sustained by one person and up to $100,000  per accident, as well as up to $15,000 to pay for any property damage that the policyholder causes. This is commonly denoted as 50/100/15 coverage.

In addition, policies must currently provide uninsured motorist insurance that provides protection of $100,000 for one person and a total of $300,000 per accident.

Legislators approved these minimums in 2009 in order to keep pace with rising medical costs.

Under the changes approved Tuesday, minimums will be reduced from 50/100/15 with 100/300 uninsured motorist coverage to 20/50/10 with 25/50 uninsured motorist coverage.

Although not required, minimum medical payment policies would also be rolled back from having to provide $10,000 in coverage to being required to ensure only $1,000 in protection.

The approved legislation also does away with “stacking” provisions put into effect by the former state government. “Stacking” allows policyholders with multi-vehicle policies to use coverage applying to one vehicle to cover damages sustained by another vehicle on a policy if that vehicle’s limits have been exhausted.

The changes would not take effect until 2012.

About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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