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Car Insurance Mandate Begins in Wisconsin

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All Wisconsin drivers must carry auto liability insurance starting June 1, but it’s unclear how many will follow the law.

Only about 15 percent of the state’s drivers are currently uninsured, which is roughly the same percentage as the national average. Every state except New Hampshire requires liability coverage.

“The fanfare surrounding around June 1 is a false promise to the drivers of Wisconsin that everyone on the road will have auto insurance,” said Andy Franken, president of the Wisconsin Insurance Alliance. The alliance represents insurance companies and spent more than $500,000 lobbying against the changes passed by the Legislature.

Since Wisconsin’s rate of uninsured drivers was right around the national average of 14 percent before the law passed as reported by the Insurance Information Institute, having it in effect won’t result in many new drivers signing up for coverage, Franken said.

There will always be a certain percentage of drivers who don’t carry insurance, Franken said. As costs go up, especially in a bad economy, those who choose to go without will only increase, he said.

Even though some people will ignore it doesn’t mean there shouldn’t be a law, said Paul Gagliardi, president of the Wisconsin Association for Justice. His group, which represents trial attorneys, pushed for passage of the law and other insurance reforms they argue will make rates even more competitive in the state.

Other changes that have already taken effect include increasing the minimum levels of coverage required and mandating coverage for underinsured drivers.

“Just because people turn and look the other way doesn’t mean that as a goverment we’re not supposed to try to spread risk among those that should be responsible for the risk,” he said.

It’s not fair for someone who’s in an accident they didn’t cause to have to pay for repairs to their vehicle because the driver at fault doesn’t have insurance, said state Sen. Tim Carpenter, D-Milwaukee, who supported the law.

The law “will provide the extra incentive for all drivers in Wisconsin to be responsible and to carry automobile insurance,” he said.

The state’s Office of the Commissioner of Insurance has received 150 inquiries about the new law this year, with most from regular people wondering what they need to do to comply, said department spokesman Jim Guidry.

Agents for American Family Insurance, the largest auto insurer in Wisconsin, haven’t reported a dramatic uptick in business, said company spokesman Steve Witmer.

Witmer said he couldn’t predict how many of the uninsured drivers would obey the law.

“I don’t know if anyone has a real good handle with why people haven’t bought liability insurance in the past,” he said.

Since 1946, Wisconsin law had assumed that drivers automatically accept financial responsibility for crashes they cause. Motorists who can’t pay lose their license and registration until they can. When they apply for reinstatement they must show proof of insurance.

In 2007, there were 8,309 claims made against 10,890 uninsured drivers in Wisconsin, according to the latest Department of Transportation figures.

Under the new law, drivers must purchase liability insurance or face a fine of up to $500. People who don’t have the insurance, but lie to police and say they do, can be fined up to $5,000. Any driver with valid insurance but who fails to present a card proving it when stopped by police can be issued a $10 ticket.

The minimum level of liability insurance required is $50,000 for causing injury or death of one person, $100,000 for injury or death of two people and $15,000 for property damage.

Police can only enforce the law if a motorist is pulled over for another offense.


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