Budget Bill Provision Would Affect Car Insurance Bills

Bill Would Create New Minimums On Medical Liability Coverage

MADISON, Wis. -- A provision in Gov. Jim Doyle's newly proposed budget could have an impact on residents' car insurance bills. It would create new minimums on medical liability coverage for residents' vehicles, although the state doesn't actually require anyone to have car insurance.VIDEO: Watch The ReportCurrent law says if you have car insurance, your medical liability coverage has to be at least $25,000 per person and $50,000 per occurrence for personal injury. The proposal would change it to $100,000 per person or $300,000 per occurrence for personal injury."It's a very important provision and it's long overdue. Those minimums haven't been changed in almost 30 years," said attorney Keith Clifford.Trial lawyers in the state called it a win for consumers and said it will actually help drive down health care costs."What's happened over the years is because liability coverage hasn't kept pace with medical expenses, health insurers are picking up much more of it and they're not getting reimbursed," Clifford said.But insurance companies said this would give Wisconsin the highest liability minimums in the country, and might only drive those who can't afford them to drop coverage altogether."Consumers in Wisconsin benefit from a competitive marketplace and these provisions will increase those rates 33 to 43 percent on average," said Andrew Franken of the Wisconsin Insurance Alliance.WISC-TV asked American Family Insurance agent Brad Bodden to give some examples of how the coverage would affect residents.A 30-year-old couple with a clean driving record and a 2003 Subaru would see rates go up from $183 per year to $236 per year.Bodden said a 55-year-old driving a 2008 Chevy Impala would see rates go from $137 a year to $177 a year.But Bodden said a 22-year-old male with some driving infractions and a 2005 Ford Focus would see rates go from $782 to $1007."This is the person that would see the biggest impact -- the person who can barely afford their insurance to begin with, has a few driving infractions and needs to bump up their limits," said Bodden.Clifford also did the same calculation on his own car through an online insurance company and saw his premium go down. Franken and Bodden said that was likely an anomaly and that for most people their premiums would go up.Wisconsin currently pays the third lowest auto insurance rates in the country, and the Wisconsin Insurance Alliance said that about 25 to 30 percent of state residents only have the minimum liability coverage.

source