Wisconsin's New Insurance Law Significantly Better

The Wisconsin legislature will seat new freshmen lawmakers after January 1, 2011, with a swing of power going to one party. While that may be good for some initiatives, one matter of deep concern is the fear that the insurance reforms passed last year will be eliminated and the old insurance law will be put back in place. That would be a serious step backward for injured motorists.

The 2009 Wisconsin Legislature passed comprehensive changes in the state's insurance law, reinstating beneficial components gutted back in 1995. These changes started in January, 2010, with the mandatory minimum limits increasing from $25,000 per person and $50,000 per accident to $50,000 per person and $100,000 per accident.  Property damage liability was raised from $10,000 to $15,000. That was only the beginning of the good news.

Probably the most significant changes in the law dealt with Uninsured (UM) and Underinsured (UIM)coverage. The old minimum coverage for UM was $25,000 per person/ $50,000 per accident and $50,000 per person/$100,000 per accident for UIM.  Under the new law, both UM and UIM minimum coverage are set at $100,000/$300,000.  UM coverage was automatic but UIM had to be purchased separately.  It now is standard with UM coverage.  In addition, in the case of excess insurance policies, like umbrella coverage, UM and UIM coverage must be offered to the policy owner in writing. This means you can bring your vehicles under your umbrella coverage for additional protection in the event you are injured due to someone else's negligence.

Another huge advantage in the new insurance law is the removal of anti-stacking provisions and reducing clauses. This means you can stack multiple policies of UM/UIM coverage, policies you previously may have paid for but could not collect from, in order to be better or fully compensated if the at-fault driver's policy did not cover the damages. That's another important distinction. Under the old law, you had to carry more UIM coverage than the other driver to collect from the policy. Now, if you have $100,000 in UIM and the at-fault driver has $100,000 liability but it doesn't cover your damages, you can collect his policy and up to your UIM limit for a total of $200,000.  Before, insurance companies could reduce the amount of UIM coverage you collected by the amount of money you collected from the other persons liability policy. Therefore, in the example above, the most you would recover would be $100,000.

Medical payment coverage in the past was elective and was set at a minimum limit of $1,000 per person unless rejected by the policy holder. Under the new provisions, medical payments coverage is increased to $10,000 per person and like UM and UIM, you can stack medical payment coverage from other policies with a three vehicle limit.

Another important aspect, especially for motorcyclists, is a change in the definition of hit-and-run. Previously, physical contact was a precondition to coverage.  Under the new law, even in the absence of contact (a car cuts you off and you crash) you have the ability to collect from your UM policy provided there is an independent 3rd party witness to the incident. The exact meaning of "independent witness" is not clear and may be a matter of contention.

The new insurance law for Wisconsin is absolutely a good thing for all of us. There were rumblings that the new coverage and the mandatory insurance provision would raise premiums by as much as 33%. That has been refuted by Citizen Action of Wisconsin in a September, 2010 Consumer Watchdog Report.  Actual increases were less than 1% for top insurers in the state.

Wisconsin needs to retain this consumer friendly insurance reform that provides much better protection for our motorists.  To return to the old insurance coverage would be devastating for seriously injured motorists and motorcyclists.

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