Representatives from insurance companies operating in the state of Wisconsin say that motorists who own multiple vehicles can expect premiums to rise with the implementation of a new law in Wisconsin mandating Wisconsin auto insurance. According to industry sources, Wisconsin’s approval of mandatory car insurance for all its car owners and motorists can result in skyrocketing insurance costs.
Earlier this year, Gov. Jim Doyle approved the state budget for next year. A provision included in the budget bill calls for all motorists in Wisconsin to present proof of insurance during routine traffic stops. Law enforcement agencies would be requiring car owners and drivers to have proof of insurance. Motorists without valid insurance coverage initially face a $10 fine. Succeeding violations can result to hefty fines, loss of some legal rights, and even jail time.
The new provision is set to be implemented on November 1 of the present year. Legislators and policymakers chose an earlier date than originally planned because of increasing concerns that the presence of uninsured drivers can lead to more costly accidents. Experts say that with the unemployment rate expected at 26-year highs and expected to breach the 10-percent mark by the end of this year, the Wisconsin may be seeing more uninsured or underinsured motorists behind the wheel.
Insurance companies say that because the new law also increased the minimum liability amounts required by the state, motorists who own multiple cars may have to pay more for insurance. The minimum coverage amounts can double or even triple for drivers with two, three, or more vehicles. For instance, a single car can mean $1 million in coverage for a provider. Having two vehicles under the name of the same policyholder will eventually mean that insurers have to account for $2 million in coverage. Because of the added coverage amounts, providers have to increase insurance premiums to stay afloat.
Sources say that 90 percent of all insurance policies in Wisconsin are expected to increase when the provision takes effect in just over a month’s time. Some analysts are also cautioning that the new law could backfire and instead result in more motorists dropping their policies because of higher premiums. Critics of the provision argue that by requiring drivers to have insurance, the state government may have just triggered a sudden increase in rates, which, in return could lead to more uninsured drivers on Wisconsin roads.