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Wisconsin: Nov 2011 changes to state required auto insurance coverages


Question: I see Wisconsin is changing their car insurance requirements again.  As of November 1, 2011, what are all the changes the state of Wisconsin is making to auto insurance coverage?

Answer:  Two years ago, Wisconsin finally made auto insurance required of all drivers (with Act 28) but with pretty high limits.

Now new Wisconsin law, Act 14, keeps car insurance mandatory for every motor vehicle operated in Wisconsin, but the required coverage limits are being reduced in an effort to make car insurance more affordable.

Auto insurance policies that are newly issued, or renewed, on or after Nov. 1, 2011, must now carry at least $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident and $10,000 of property damage liability. This coverage is referred to as 25/50/10 and is greatly reduced from the previous liability requirements of 50/100/15.

Uninsured motorist bodily injury is still required, but the new limits have also been reduced to $25,000 per person and $50,000 per accident (25/50). This is down from the old requirements of $100,000 per person and $300,000 per accident (100/300).

Underinsured motorist bodily injury coverage is now optional. You can choose to carry as little as $50,000 per person and $100,000 per accident (50/100); this is down from the old, mandatory minimum requirements of 100/300.

Medical payments coverage is optional, and now you have choices starting as low as $1,000, which is a change from the previous minimum amount of $10,000.

Act 14 repeals the definition of an underinsured motorist, thus leaving it up to the individual insurance policy to define this coverage.

The definition of an uninsured motor vehicle is revised to include conditions for accidents that involve a phantom vehicle -- one that may cause an accident without actual physical contact with another vehicle. Wisconsin law now allows that a phantom vehicle is considered an uninsured motor vehicle, if all of the following apply:

  1. The accident is corroborated by competent evidence that is provided by someone other than the insured.
  2. Within 72 hours after the accident, the insured reports the accident to the police.
  3. Within 30 days after the accident the insured files a statement, under oath, with their insurer attesting to the facts of the accident.

Current Wisconsin auto insurance law prohibits insurance companies from using “reducing clauses” in a policy to decrease payouts based on other sources of compensation. The new law allows that the limits of an uninsured motorist bodily injury or underinsured motorist bodily injury policy can be reduced by:

  • Amounts of payments made by a third party that was legally responsible for injuries or death which the payment is made (such as the at-fault driver’s policy);
  • Amounts paid by worker’s compensation; and
  • Amounts paid under any disability benefits.

The stacking of uninsured and underinsured motorist limits, up to three vehicles, is no longer required. The stacking of medical payments limits, for a person not using the vehicle at the time of the accident, such as a pedestrian, is also no longer required.

Car insurance companies are now actually allowed to put anti-stacking language into the policy that prohibits insureds from stacking their coverages.

Act 14 allows that car insurance providers can now place an auto insurance applicant into a high-risk category for assessing risk if the driver hasn't previously had auto insurance. Under the old law, this was prohibited.

These are the main changes to auto insurance policies in Wisconsin due to Act 14. There are a few others revisions of law that aren't specific to personal auto insurance policies. To learn more about the changes, you can contact the Wisconsin insurance regulator.

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