New state laws alter car insurance policies

As the debate over universal health insurance coverage rages on at the national level, Wisconsin recently mandated its own type of universal insurance coverage for operators of motor vehicles.

The new auto insurance laws, which were endorsed by Gov. Jim Doyle Monday, June 29, require every driver of a vehicle in Wisconsin to have auto insurance.

“Wisconsin had been one of the few states in the country that did not require all drivers to have insurance,” said Greg Bovre, State Farm Insurance agent in Sheboygan Falls. “Now everyone will need to have insurance coverage, or they will face a penalty, fine or simply won’t be able to buy a car.

“This is something that has been bantered around for quite a long time,” he said. “Right now we don’t really know how all of this is going to play out, as far as how these laws are going to be enforced.”

Under the mandatory insurance law, all drivers will need to carry proof of liability insurance with them at all times to provide to law-enforcement officials, upon request.

“Insurers typically provide written proof of insurance for the purpose of providing it to police when asked,” Bovre said. “Although this is well known to all insured motorists, who have proof of insurance stored in their wallets or their cars, this will now become mandatory for everyone.”

The law requiring car insurance coverage will go into effect June 1, 2010. Bovre advises all drivers to prepare for coverage as soon as possible.

“We want to make people aware of these changes well in advance, so everyone knows what is coming,” Bovre said. “It is always wise to be prepared with as much information as possible, when taking on a big decision like selecting car insurance.”

Several other changes will take effect, starting Sunday. Nov. 1. • Underinsured coverage will become mandatory, rather than optional for all drivers.

• Uninsured and underinsured coverage limits will increase.

• Minimum medical payments coverage will increase to $10,000, but drivers still may chose not to be covered.

• Insurers will be required to provide written offers of uninsured and underinsured coverage when selling or renewing umbrella liability policies.

“Uninsured or underinsured coverage comes into play, when someone who has no insurance or inadequate insurance is clearly at fault for an accident, which causes bodily harm to someone who is fully insured,” Bovre said. “If this happens, the victim’s policy will cover damages that would normally be paid by the insurer of the driver, who is at fault in the accident.

“Uninsured and underinsured coverage are proactive policies, which offer additional protection in the event of an accident,” Bovre said. “Approximately 98-percent of the customers at our agency already have this coverage.”

On Jan. 1, 2010, the amount of required liability coverage will jump and be adjusted for inflation every five years, beginning in 2016.

The minimum coverage limits for uninsured and underinsured motorist policies will increase to $100,000 per person and $300,000 per accident.

Minimum limits for liability coverage will also rise to from $25,000 to $50,000 per person and from $50,000 to $100,000 per accident, with an additional minimum increase from $10,000 to $15,000 for property damage.

While the new laws will benefit insurance agencies, there are many uncertainties regarding their overall impact.

It is unclear as to if or how the laws will alter Wisconsin’s notoriously low insurance premiums.

“In my 23 years as an insurance agent, many people have asked me why everyone is not required to have car insurance,” Bovre said. “These laws will bring in more business for agents.

“However, we don’t know exactly how this is going to play out or how it will impact car-insurance premiums, which are extremely low in Wisconsin in comparison to the rest of the country.”

Regardless of level of insurance coverage, Bovre urges all motorists to talk with their insurance agents, if they have any questions about their policy.

“If you are at or below the mandated levels of insurance, it is beneficial to talk with your agent as soon as you can,” he said. “Call with your questions.

“The impact of the new regulations will vary from person to person, depending upon each individuals’ policies and circumstances. The best time to make sure you have the right coverage is before you need it.”

For more information on Wisconsin’s new car insurance laws and how they affect you, contact your insurance agent.

To reach Greg Bovre’s State Farm Insurance office, located at 335 Monroe St. in Sheboygan Falls, call 467-4333.