In an effort to bring down the number of uninsured motorists, a new law would be implemented mandating every vehicle owner to obtain auto insurance.
This law, which is set to be enforced in June, would put Wisconsin along with 48 other states that have mandatory laws requiring insurance policy amongst its constituent drivers.
A text of the law would read that “no person may operate a motor vehicle upon a highway in this state unless the owner of the vehicle has in effect a motor vehicle liability policy with respect to the vehicle being operated.”
This means that drivers are required to carry proof of insurance whenever driving and such must be presented to traffic officers upon demand.
It is estimated that there are millions of uninsured drivers in Wisconsin. One out of 10 motorists is figured as not having any coverage.
Section 296t of Act 28 would also increase minimum coverage limits for auto liability policies. It raises policies to “$50,000 because of bodily injury to or death of one person in any one accident, and subject to such limit for one person, $100,000 because of bodily injury to or death of two or more persons in any one accident, and $15,000 because of injury to or destruction of property of others in any one accident.”
However, even as the number of policy holders is expected to rise, some insurance companies are not optimistic about the prospect of having more customers.
John Young, an insurance agent, said that because of the minimum amount of coverage consumers are likely to pay more.
He estimates a 5 percent increase or rise in the rates and this would lead to about $100 additional payment annually.
The cash crunch he implied could be worse for those who have had minimal coverage in the past. From $1,600, this fee could rise to as much as $2,000 every six months.
There are also concerns that because of the mandatory minimum, it would be harder for some uninsured vehicle owners to obtain the required insurance. Young reasoned that if they cannot afford today’s insurance, it is very likely that they will not be able to afford it when it becomes compulsory.
It may be noted that Gov. Jim Doyle did not suggest that all drivers must purchase liability insurance. However, he only vetoed some provisions relating to further increases. As such, there would be no policy limit increases in 2011 and 2012 and new additional limits would be only permitted only after being indexed for inflation.