Minimum levels of auto coverage will be reduced, and ‘stacking’ provisions will be eliminated
The minimum amounts of auto insurance that Wisconsinites are required to carry will be reduced to 2009 levels if Gov. Scott Walker signs into law a bill passed by state senators on Tuesday.
The Senate’s vote this week was largely procedural, since it already passed an identical bill at the beginning of February.
The bills aim to roll back changes that were pushed through in 2009, when Democrats held majorities in state government.
As a result of the 2009 changes, Wisconsin drivers currently must carry liability car insurance that will cover damages at least up to the ,000 level for bodily injury to one person and up to 0,000 per accident. In addition, a policy must also cover for at least up to ,000 worth of property damages caused by the policyholder.
The current levels of required coverage often get denoted as 50/100/15.
But if Gov. Walker signs the bill into law, which he is expected to do, the minimum levels of liability coverage would be reduced to 25/50/10.
Also, the amounts that drivers must carry to protect themselves from damages sustained in an accident caused by an uninsured motorist or a hit-and-run driver would also be reduced. Wisconsinites currently have to carry uninsured motorist insurance that will pay for at least up to 0,000 in bodily injury damages per person and 0,000 per accident for these types of crashes. The proposal reduces those amounts to ,000 and ,000, respectively.
The same goes for medical payments coverage. Residents now have to purchase at least up to ,000 in medical payments insurance if they opt to purchase that coverage, but that minimum amount would be reduced to ,000.
Supporters of the bill say that all of these changes need to be made in order to make cheap car insurance prices more widely available in the state. They say the 2009 increases in minimum levels of financial protection drove up prices, reduced consumer choice and forced some to drop coverage altogether.
The jury, though, is out on the actual effects of the changes. The average premium hike caused by the 2009 increases have been estimated to be from less than 1 percent to more than 30 percent, and the state insurance commissioner has not weighed in with any objective numbers.
The changes would take effect seven months after the governor signs the bill.
Final elements of the bill make changes to more esoteric parts of car insurance law.
One change it would make is to do away with “stacking,” a practice that allows consumers with multiple-car policies to transfer protection from one insured vehicle to the next.
There are many different types of drivers, and for this reason there are also many different automobile insurance policies and providers. Insurers typically determine an individual’s premium based on a series of factors, but one of the most influential contributors is the likelihood that a motorist will be involved in an accident or will file a claim. Policyholders that are considered by insurers to be prone to such unfortunate occurrences are often considered a higher risk to insure. There are several reasons why a motorist would be thought of as a riskier to cover by insurers, though age and driving experience are often factors. Motorists under the age of 25, particularly teenagers or single males, are generally considered to have a higher likelihood of being involved in an accident and are consequently more likely to experience increased rates when compared to more mature motorists.