Insurance Coverage Requirement Change in Wisconsin

October 29, 2010

The Wisconsin Legislature made significant changes to insurance coverage for automobiles last year that became effective this year. According to the Wisconsin Insurance Commissioner, effective June 1, no one may operate a motor vehicle in Wisconsin unless the owner or operator has a motor vehicle liability policy in place covering that vehicle that has minimum liability limits of $50,000 per person and $100,000 per accident for bodily injury and $15,000 for property damage.

Because coverage is now mandatory, drivers are also required to have proof of the vehicle's liability coverage in their possession if they are asked to produce evidence of coverage by law enforcement officials. The law provides for a number of limited exceptions to the insurance requirement.

These changes bring Wisconsin into line with the rest of the nation, leaving only New Hampshire as not mandating insurance coverage for automobile drivers in the state.

Uninsured Motorist(UM)/Underinsured Motorist (UIM)

Uninsured and Underinsured coverage is often confusing to the average driver, more so when combined with the dollar policy limits. Nevertheless, they are fairly straightforward. Uninsured coverage is just that; your policy covers you if the other driver is uninsured.

Underinsured coverage is a little more confusing; it covers situations where the primary coverage is inadequate to cover the damage. Coverage requirements for each auto, whether under separate policies or one policy, must be insured for the minimum UM limit of $100,000 per person /$300,000 per occurrence. UIM was not previously required, is now mandatory, and the minimum amount you can have is $100,000 per person /$300,000 per occurrence.

The statutes now define "Under Insured" motor vehicle and "Uninsured" motor vehicle, with the useful addition of including unidentified vehicles: "an unidentified motor vehicle, provided that an independent 3rd party provides evidence in support of the unidentified motor vehicle's involvement in the accident."

This means you can access you UM coverage in an accident where the vehicle that 'caused' the accident, say, by a sudden lane shift, forces your vehicle into another lane resulting in damage to your vehicle and another vehicle.

Reducing Clause

This clause was permitted in the old law and 'reduced' your recovery to the limit of your policy. If you had $20,000 in coverage, and the other driver had $50,000 in coverage and your injuries totaled $40,000, under the old law, your recovery would be limited to $20,000. Under the new law, you could access $20,000 in coverage from his policy.

Stacking

"Stacking" with insurance coverage, describes a situation where you have three cars insured by the same company and you have an accident. Say, each policy has a $100,000 limit for total damages, and your damages are $300,000. If your policies permit 'stacking,' you can stack (or add together) all three policies $100,000 limit to fully cover your damages.

Prior to last year's legislative activity, an insurance company could prohibit stacking in the contract language. The statues now permit stacking. This is especially helpful where the other driver is uninsured.

Involved in an accident and not sure what all this means?

If you have been involved in any motor vehicle accident, you should speak with an attorney before you speak to anyone. An attorney can examine your insurance policy and explain the type of coverage you have, and based on your facts, determine the coverage that is available to you. An attorney can also investigate to find other insurance policies that may be available to you.

They can also assist if you would need to file a lawsuit against the other driver. Insurance law is complex and has many traps for the unwary; an experienced attorney can help you receive coverage from all available insurance policies.

Article provided by Stephen B. Strnad, S.C.
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