Wisconsin’s auto insurance law and its financial impact has been questioned


shutterstock_19089616Opponents of the bipartisan-backed auto insurance law as well as insurance experts state that there is very little evidence that this measure of reducing minimum coverage to the pre-2010 levels will lower auto insurance costs for the motorists in Wisconsin.

Looking at a piece of legislation and trying to correlate that with the premium changes is a very complex affair, stated Steve Witmer, spokesman for American Family Insurance, which is one of the biggest auto insurance companies in Wisconsin.

According to the new law the minimum coverage standards signed by Jim Doyle in 2009, would be erased. He had signed the legislation boosting the minimum coverage since 1982. As per this law, the bodily injury liability coverage was doubled to $50,000 per person and $100,000 for injuries in many people, and it also lifted the minimum property damage by 50% to $15,000.

Gov. Scott Walker argued that these rules caused a huge spike in the insurance costs especially for the low and middle income drivers who could only afford the minimum coverage. He signed a law on the 12th of April, and this will return the minimums to the pre-2010 levels.

Walker also stated that repealing this anti-consumer mandate was good for the middle class residents from Wisconsin as well as the small business owners. He also stated that he was proud to sign its repeal as well as replacement.

However, experts claim that it is still unclear as to how much the premiums had gone up as per the current rules, if at all there were any. In fact, they also state that it is hard to guess how much the costs could fall.

There are some changes that take a while to be shaken out in order to actually feel the impact, stated Witmer from American Family Insurance. He also was unsure if they actually had felt the whole impact of the 2009 changes right until this point.

Andrew Franken, President, Wisconsin Insurance Alliance which is a trade association stated that there were no hard numbers. They only heard that the costs had gone up by up to around 30%, but it was really too early to tell.

Executive director, Citizen Action of Wisconsin, Robert Kraig, opposed the repeal while disputing claims that the cost of auto insurance had risen substantially.

Kraig also stated that they in fact, did a report which showed a slight increase in rates, which was much lesser than the historic average.