Wisconsin Residents Will Face Turmoil without "Truth in Auto Insurance Law"

The auto insurance industry has become a political battle ground in the last year. When Republicans took over more seats after the 2010 elections the decided that they wanted to start undoing many necessary changes to auto insurance laws that Democrat politicians had implemented during their tenure. Now in the state of Wisconsin, there is a new governor named Scott Walker. He took office in January of 2011 and has already impacted the lives of many drivers by his political moves.
A law called the “Truth in Auto Insurance Law” has now been repealed by Governor. Most people thought that the laws were much tougher but that reforms needed to be implemented to improve the auto insurance system in the state. Now that the reforms have been overturned much weaker laws have been put in their place which has hurt drivers in the state.
Wisconsin residents had been promised that the repealing of the “Truth in Auto Insurance Law” would benefit their state’s economy by producing new jobs. However, since its repeal very few jobs have been created and drivers who get involved in automobile accidents will face every more serious financial consequences due to the new laws that have taken effect.
Many Wisconsin residents have wondered why the Governor even took up this cause because the state ranked fourth in terms of its costs for auto insurance premiums. Most consumers were satisfied with their monthly auto insurance premiums and saw no justification for undoing the law. Most people outside of the state of Wisconsin have never heard of the bill or why it was a good law to have on the books.
The law was in essence making it so that drivers had a safety net for them if they became injured due to becoming involved in an automobile accident. Each driver was required to have $100,000 in liability coverage and if they were found at fault for the accident then they would have to have their auto insurer pick up the tab for any injuries and medical treatments for the injured persons. Now, the new law that is in place would reduce liability coverage requirements to $50,000, allow people to stack auto insurance policies and change the terms regarding underinsured motorists.
The main problem with the new law is that only auto insurers will truly benefit from this because it puts less of the financial burden on them and shifts it to their policy holders. For example, if a person got involved in an automobile accident and caused $150,000 worth of damage and injuries to a person, then the driver would owe $100,000 if they had liability coverage only under the new law. If they were under the old law then they would only owe $50,000 in monetary damages. This makes it much better for auto insurers because they will reduce the amount of money that they have to write in claims checks each year.
People who have underinsured insurance coverage will also face penalties under the new law. For example, if an accident has $75,000 worth of monetary damages and the driver at fault has only the minimum amount of liability coverage then the person would only get $25,000 even if their policy was worth $50,000 or more. This creates huge issues for drivers who become involved in accidents. If they buy an auto insurance policy with a specific monetary amount then it should be honored no matter what.
Auto insurance laws and limits are changing in many states. It is important for legislators to look at the risks for consumers before they drastically change laws so that the system is fairer.
Source: Digital Journal