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Auto Insurance Review What Is The Importance Of Getting Your Car Insured

Last Build Date: Fri, 03 Oct 2014 04:59:29 +0000


Auto Insurance Review Wisconsin Insurance Battle Heats Up

Thu, 06 Aug 2009 01:03:00 +0000

Governor Jim Doyle has asked the legislature to pass the Truth in Auto Insurance law. The proposal, contained within the Governor's budget, would reverse several pro-insurance-company provisions enacted in sweeping 1995 tort reform legislation and return Wisconsin law to its long-standing status.Two of the proposed changes in insurance law would have considerable impact on the ability of Wisconsin residents to obtain a full measure of justice if they are injured in automobile accident cases. The governor's proposal would forbid insurers from including in their policies two types of restrictive clauses the law now allows: anti-stacking clauses and reducing clauses.StackingThe essence of anti-stacking is that an insured with more than one policy is prohibited from accessing the proceeds of each paid for policy if the first policy does not cover his or her damages. In other words, if a Wisconsin consumer purchases two policies for two owned vehicles, or insures two vehicles on one policy that assigns separate premiums for each vehicle, and that consumer is injured by an uninsured motorist, the current law in Wisconsin limits the injured person's maximum recovery to the uninsured motorist limits of just one of the policies (or one of the cars if both are insured on the same policy).Before the insurance lobby convinced the legislature in 1995 to enact anti-consumer provisions such as the anti-stacking provision, policyholders could rely on the sum of all their policies to pay their claims, up to the amount of their documented damages. The 1995 legislative reforms outlawed these provisions by enacting anti-stacking rules.The governor's proposal would return to the pre-1995 law allowing stacking of policies, thus affording Wisconsin consumers the right to access all the coverage for which they have in fact paid.Reducing ClausesSince 1995, if a person in Wisconsin has purchased underinsured motorist (UIM) coverage on their policy, the insurer generally has had the right to subtract from that policy limit the amount of any proceeds received from the negligent party's liability insurance. Reducing clauses prevent the purchasers of UIM coverage from ever collecting the coverage they have paid for, because their recovery would automatically be reduced by the at-fault driver's insurance payout. In other words, if a Wisconsin consumer purchases as part of his/her policy $100,000 of UIM coverage, and pays a premium for the full $100,000 of coverage, that $100,000 is reduced by the amount of money the injured person collects from the underinsured motorist, or from a worker's compensation or disability policy.This guarantees that the injured and insured consumer can never collect the full limit of the UIM coverage purchased. Governor Doyle proposes doing away with such reducing clauses and allowing an insured to collect up to the full amount of his or her UIM coverage without regard for insurance payments received from the negligent party's insurer.This change would also apply to prevent other reductions from insureds' policy limits, such as the amount of workers' compensation or disability insurance payments.The Governor's PhilosophyThe governor's proposals are seen by consumer-friendly groups as positive because insured persons would receive the full amount of the coverage purchased on their policies, where appropriate. In essence, they would get all that they paid for. When insurance does not cover the full amount of damage from vehicular accidents, individuals, families, health insurers and public insurance programs are left to cover the rest of the medical and other expenses. The proposed changes in the law would help alleviate the burden of the losses sustained in a serious automobile accident from being dumped on the injured person, health insurers, or public programs such as Title IXX.It is the governor's view that insurance coverage bought and paid for by the injured person ought to bear as much of this burden as the paid in premiums dictate.Critics RespondThe insurance industry protests that prohibiting their ability to include[...]