Wisconsin, one of only two states not requiring car insurance, will soon join the 48 other states by next year. A new provision in the state’s budget bill for 2010 will require motorists to present proof of insurance whenever law enforcers ask for it. The new law will also increase the minimum liability amounts, which have remained unchanged since the early 1980s.
While many supporters of mandatory auto insurance rejoiced over the milestone, critics of the provision are calling it unfair to millions of car owners in Wisconsin. Those who oppose the mandatory insurance provision say that by requiring all car owners to have insurance and by increasing the minimum liability amounts substantially, citizens have to shell out more of their hard earned money.
The provision also calls for a modest $10 fine if drivers are caught driving without any proof of insurance. However, critics point out that the new law would give law enforcers the freedom to pull over motorists even for suspicion of minor violations, such as not wearing seatbelts. While the small fine may not be enough to deter erring drivers, the cost in terms of increased insurance expenses can be dear.
Some industry analysts say that being issued a ticket, albeit for a minor violation, can have dire consequences on a policyholder’s insurance premiums. Detractors argue that the $10 fine, once insurance providers find out, can quickly turn into insurance rate increase between 25 and 50 percent. As a result, more and more concerned citizens and experts are calling on the state government under the leadership of Gov. Jim Doyle to review the provisions before it’s too late.
Critics of the provision also blame the governor himself for the projected high insurance premiums and subsequent increases. At present, the minimum liability amounts at $50,000 per individual, $100,000 for every accident involving physical injury, and $15,000 for property damage. When the bill takes full effect in November, the minimums will become $100,000 for each person, $300,000 for bodily injury, and $100,000 for property damage.
Some experts say that the sudden increase is forcing many insurance providers to be more aggressive when dealing with policyholders. Any mistakes or tarnished driving records can immediately mean higher premiums when car owners renew their insurance policies. Many insurance companies are also planning to charge clients anywhere from $40 to $200 more each year to cover policyholders from underinsured and uninsured motorists.