During his budget address this week, Gov. Jim Doyle proposed increasing the minimum amounts of liability coverage required for drivers. The governor would raise the current liability limits of $25,000 for each person, $50,000 for each accident, and $10,000 for property damage per accident to $100,000, $300,000 and $25,000, respectively. Wisconsin would have the highest mandatory auto liability limits in the nation if the law were to pass.
“The changes would translate to increases of 40 percent or more in auto insurance premiums,” said Mark Johnston, NAMIC’s Midwest state affairs manager. “This would especially impact low- and middle-income families, since many of those with higher incomes already choose the higher coverage levels and, therefore, would not be impacted as severely.”
Johnston says the governor’s proposal would also undo many tort reforms that protect defendants who bear little responsibility for an accident. Someone who is barely connected to an accident could end up paying the entire amount of the damage. “An example would be when an uninsured drunk driver causes a horrific accident. The plaintiff’s lawyer will strain to look for someone else with insurance, such as another driver or a property owner near the scene of the accident, who somehow can be said to have contributed to the accident,” Johnston explained.
The proposal would also drive up costs by allowing the “stacking” of insurance policies, requiring uninsured motorist coverage when an accident is caused by a phantom car – which would result in increased fraud, and increasing the amount of paperwork required, Johnston explained.
“These are significant public policy changes, and they need to go through the proper legislative process where there is time for analysis and public comment,” Johnston said. “Sticking the legislation in the budget greatly reduces the opportunity for scrutiny and usually creates legislative mistakes.”