Gov. Walker Lowers Car Insurance Rates

Wednesday, 13 Apr 2011 09:12 AM


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MADISON, Wis. - Gov. Scott Walker signed into law Tuesday a bill designed to lower car insurance rates by undoing higher coverage requirements approved by Democrats less than two years ago.

Republicans successfully used the car insurance issue on the campaign trail last fall as they won back majority control of both the Assembly and the Senate. They made undoing the higher coverage requirements one of their top priorities.

"This is one more step in empowering consumers across the state of Wisconsin," Walker said shortly after signing the bill in front of more than two dozen lawmakers, including Democratic Rep. Jason Fields, who backed the bill. The measure passed the Legislature with bipartisan support.

State insurance regulators and the insurance industry all said the changes passed by Democrats in 2009 led to higher rates. When consumers started to complain, Democrats said any increases in costs were due to decisions made by insurance companies, not the higher coverage levels.

The Wisconsin Insurance Alliance, which represents insurance companies, supported the bill signed by Walker. The Wisconsin Association for Justice, which represents trial attorneys, opposed the measure and argued that insurance companies would simply provide less coverage but not lower rates accordingly. They also argued that the higher coverage requirements were necessary because the levels had been stagnant for more than 20 years.

The bill Walker signed would keep car insurance mandatory, one of the changes that was made in 2009.

But the required minimum levels would drop, sometimes by tens of thousands of dollars in some categories. For example, current liability minimums of $50,000 for injuring or killing one person, $100,000 for injuring or killing two people and $15,000 for property damage would drop to $25,000, $50,000 and $10,000.

Under current law, all auto insurance policies must have underinsured coverage. That coverage, which had been voluntary, is for when another motorist causes an accident and has lower liability limits than the amount of damages in the accident.

The bill Walker signed continues to make that coverage mandatory, but the required level drops from $100,000 per person and $300,000 per accident to $50,000 per person and $100,000 per accident.

The bill also bans a practice known as "stacking," in which motorists involved in a crash with a covered vehicle apply uninsured and underinsured coverage from up to three other vehicles to help pay for their damages.

The law takes effect Nov. 1.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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