Now You See It, Now You Don’t
The ever-changing laws of auto insurance
In 1995, the Legislature enacted tort reform legislation that instituted a number of restrictions. In 2009, the Truth in Auto Insurance bill undid many of the 1995 reforms and, notably, required all Wisconsin drivers to obtain auto insurance. Now, legislation set to take effect on November 1, 2011, reverses most of the 2009 laws. This article highlights some of the upcoming changes.
Auto insurance will still be required; however, the minimum levels of coverage will decrease from the 2009 levels. The new law reverts liability coverage back to $25,000 per person, $50,000 per accident, $10,000 for property damage, and $1,000 for medical payments.
Underinsured (UIM) and Uninsured (UM) Coverage
The 2009 law required all auto policies to include UIM coverage of $100,000 per person and $300,000 per accident. The new law does not require UIM coverage at all. Rather, an insurer must only provide a written offer to customers for such coverage in the amount of $50,000 per person and $100,000 per accident.
With respect to UM coverage, the 2009 law mandated coverage of $100,000 per person and $300,000 per accident. The new law requires UM coverage of $25,000 per person and $50,000 per accident.
In the context of UM coverage, the new law also creates a required procedure for accidents caused by “phantom vehicles” (i.e. accidents not involving physical contact between vehicles). In order to access UM coverage in such accidents, three conditions must be satisfied: (1) an independent witness verifying the existence of the “phantom vehicle”; (2) notification of law enforcement within 72 hours; and (3) an under-oath statement supplied to the insurance carrier within 30 days.
Stacking and Reducing Clauses
The 2009 law permitted persons to “stack” up to three policy limits for the same accident (e.g. $100,000 UIM coverage x 3 insured vehicles = $300,000 of UIM coverage). The new law permits policies to prohibit stacking; thus, limiting coverage to the stated policy limit regardless of the number of insured vehicles.
The 2009 law precluded policies from containing “reducing” clauses. Meaning, an injured person could potentially obtain the total of her own coverage plus an at-fault driver’s coverage (e.g. $100,000 UIM coverage + $50,000 at-fault driver coverage = $150,000 total coverage). The new law allows reducing clauses which permit insurers to reduce coverage equal to the amount received from other sources.
The 2009 law mandated insurers to offer UIM and UM coverage in umbrella policies. The new law reverses the mandate and permits insurers to issue umbrella policies without offering the extra UIM and UM coverage.
Menn Law Firm, Ltd. regularly advises clients on issues of insurance and represents parties injured in accidents. For further information, please contact Attorney Brenton Teeling by email firstname.lastname@example.org or by phone 920-731-6631. All Menn Law attorneys can be reached by phone at 920-731-6631 to discuss any legal services you may require.
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