PJK&ARG:bjk:md
2009 - 2010 LEGISLATURE
October 27, 2009 - Introduced by Representatives Nygren, Ripp, Murtha, M.
Williams, Nerison, Van Roy, Bies, Honadel, Ballweg, Brooks, Davis, J.
Fitzgerald, Friske, Gottlieb, Gunderson, Gundrum, Huebsch, Kaufert,
Kerkman, Kestell, Kleefisch, Knodl, Kramer, LeMahieu, Lothian, Meyer,
Montgomery, Mursau, Nass, Newcomer, A. Ott, J. Ott, Petersen, Petrowski,
Pridemore, Rhoades, Roth, Spanbauer, Stone, Strachota, Suder, Tauchen,
Townsend, Vos, Vukmir and Zipperer. Referred to Committee on Insurance.
AB525,1,11
1An Act to repeal 227.01 (13) (zz), 344.01 (2) (am), 344.11, 632.32 (2) (am), 632.32
2(2) (cm), 632.32 (2) (d), 632.32 (2) (e), 632.32 (2) (f), 632.32 (2) (g), 632.32 (4) (a)
32m., 632.32 (4) (bc) and 632.32 (4r);
to renumber 632.32 (2) (at) and 632.32 (2)
4(h);
to renumber and amend 344.33 (2), 632.32 (4) (a) (intro.), 632.32 (4) (a)
53m., 632.32 (4) (c), 632.32 (6) (d), 632.32 (6) (e), 632.32 (6) (f) and 632.32 (6) (g);
6to consolidate, renumber and amend 344.15 (1) (intro.), (a) and (b);
to
7amend 121.555 (2) (a), 344.01 (2) (d), 344.55 (1) (intro.), 631.43 (3), 632.32 (4)
8(title) and 632.32 (4) (a) 1.; and
to create 344.33 (2) (a), 344.33 (2) (b), 344.33
9(2) (c), 632.32 (4) (a) (title), 632.32 (4) (a) 2. and 632.32 (4m) of the statutes;
10relating to: automobile insurance coverage limits and proof of financial
11responsibility.
Analysis by the Legislative Reference Bureau
Proof of financial responsibility
Under former law, prior to
2009 Wisconsin Act 28 (the biennial budget act),
motor vehicles operated in this state were not required to be covered by policies of
bodily injury and property damage liability insurance, but owners and operators of
motor vehicles involved in accidents were subject to certain financial responsibility
requirements. The biennial budget act retained and modified these financial
responsibility requirements following a motor vehicle accident while also requiring
insurance coverage for motor vehicles operated in this state.
Under current law, if a motor vehicle accident results in injury, death, or
property damage of $1,000 or more, the Department of Transportation (DOT) is
required to notify the operator and owner of the vehicle involved in the accident that
the person must deposit with DOT security for the accident in an amount specified
by DOT, which DOT has determined is sufficient to satisfy any judgment for damages
resulting from the accident. Unless an exception applies, if a person fails to timely
deposit security after this notice, DOT must suspend the person's operating privilege
if the person was the vehicle operator and suspend all vehicle registrations of the
person if the person was the vehicle owner. One of the exceptions is that the person
provides proof of financial responsibility. In addition, if DOT receives a certified copy
of a judgment for damages of $500 or more arising out of a motor vehicle accident,
DOT must immediately suspend the operating privilege and all registrations of the
person against whom the judgment was rendered unless the person can provide proof
of financial responsibility. In both situations, proof of financial responsibility
includes coverage under a motor vehicle liability insurance policy with the following
minimum limits for any single accident:
1. Before January 1, 2010, $25,000 for bodily injury to or death of one person,
$50,000 for bodily injury to or death of more than one person, and $10,000 for
property damage.
2. From January 1, 2010, to December 31, 2016, $50,000 for bodily injury to or
death of one person, $100,000 for bodily injury to or death of more than one person,
and $15,000 for property damage.
3. After December 31, 2016, the limits specified in item 2., above, adjusted for
inflation and published by DOT.
This bill restores former law by decreasing the minimum limits required under
a policy that is acceptable proof of financial responsibility to the limits applicable
before the biennial budget act: $25,000 for bodily injury to or death of one person,
$50,000 for bodily injury to or death of more than one person, and $10,000 for
property damage.
This bill does not eliminate the provisions of the biennial budget act that,
beginning June 1, 2010, prohibit a person from operating a motor vehicle in this state
unless the owner or operator has a motor vehicle liability insurance policy in effect
with respect to the motor vehicle. However, the bill affects these provisions by
reducing the required coverage from the minimum limits specified in items 1. to 3.,
above, to the applicable minimum limits for proof of financial responsibility under
former law: $25,000 for bodily injury to or death of one person, $50,000 for bodily
injury to or death of more than one person, and $10,000 for property damage.
Uninsured motorist and medical payments coverages
Under former law, all motor vehicle liability insurance policies were required
to include uninsured motorist coverage in limits of at least $25,000 per person and
$50,000 per accident and medical payments coverage in the amount of at least $1,000
per person. Uninsured motorist coverage provides coverage for persons who are
legally entitled to recover damages for bodily injury from owners or operators of
motor vehicles that are not insured. Medical payments coverage pays for medical or
chiropractic services provided to persons who are injured while using the insured
motor vehicle. Starting on November 1, 2009, as a result of provisions in the biennial
budget act, the level of uninsured motorist coverage that motor vehicle liability
insurance policies, except for those written by town mutuals, must include is
increased to $100,000 per person and $300,000 per accident and the level of medical
payments coverage that those policies must include is increased to $10,000. This bill
reinstates former law.
Underinsured motorist coverage
Former law did not require motor vehicle liability insurance policies to include
underinsured motorist coverage but required insurers to provide written notice of
the availability of that coverage to one insured under each policy written after
October 1, 1995, that did not include the coverage, as well as to one insured under
each motor vehicle liability insurance policy in effect on that date that did not include
the coverage. If an insured accepted underinsured motorist coverage after receiving
notice of its availability, the policy had to include the coverage in limits of at least
$50,000 per person and $100,000 per accident. Underinsured motorist coverage
provides coverage for persons who are legally entitled to recover damages for bodily
injury from owners or operators of underinsured motor vehicles. "Underinsured
motor vehicle" was not defined in the statutes.
The biennial budget act eliminated the requirement to provide notice of the
availability of underinsured motorist coverage and required, starting on November
1, 2009, every motor vehicle liability insurance policy, except for those written by
town mutuals, to include that coverage in limits of at least $100,000 per person and
$300,000 per accident. In addition, current law now defines an underinsured motor
vehicle as a motor vehicle that is involved in an accident with an insured and which,
at the time of the accident, was covered by a motor vehicle liability insurance policy
with limits that are less than the amount needed to fully compensate the insured for
his or her damages. The bill reinstates former law.
Umbrella and excess liability insurance policies
The Wisconsin Administrative Code exempts umbrella and excess liability
insurance policies from the requirement under the statutes that a policy covering
motor vehicle liability must include uninsured motorist coverage. Nothing in former
law, however, exempted an insurer writing umbrella or excess liability insurance
policies from the requirement in the statutes to provide notice of the availability of
underinsured motorist coverage.
Current law, as a result of provisions in the biennial budget act, requires an
insurer, except for a town mutual, that writes umbrella or excess liability policies
that cover motor vehicle liability to make a written offer of both uninsured motorist
coverage and underinsured motorist coverage whenever application is made for such
an umbrella or excess liability policy. Current law also requires an insurer to make
a written offer of uninsured motorist coverage at the first renewal after the effective
date of the bill of such a policy that does not include that coverage and a written offer
of underinsured motorist coverage at the first renewal after the effective date of the
bill of such a policy that does not include that coverage. An applicant or insured may
reject the coverage, but must do so in writing. If an insurer fails to provide a required
written offer of uninsured or underinsured motorist coverage and the umbrella or
excess liability policy does not include the coverage, or coverages, for which an offer
was not given, a court must, on the request of the insured, reform the policy to include
the coverage or coverages with the same limits as the liability coverage limits under
the policy. The bill restores former law by eliminating the requirement that an
insurer writing an umbrella or excess liability policy make a written offer of
uninsured motorist coverage and underinsured motorist coverage.
Miscellaneous motor vehicle liability insurance provisions
Former law defined an uninsured motor vehicle as including "an unidentified
motor vehicle involved in a hit-and-run accident." The Wisconsin Supreme Court
has held that, under that definition, actual contact was necessary. Consequently,
uninsured motorist coverage did not apply if, for example, a motor vehicle was run
off the road by another motor vehicle without actual contact between the two
vehicles. Provisions in the biennial budget act changed this so that actual contact
is not necessary for uninsured motorist coverage to apply. All that is required is that
an unidentified motor vehicle be involved in the accident. However, if there is no
contact, an independent third party must provide evidence in support of the
unidentified motor vehicle's involvement. The bill restores the definition in former
law.
Current law, as a result of provisions in the biennial budget act, makes a
number of formerly permissible provisions prohibited in a motor vehicle liability
insurance policy. The bill restores former law, making the following provisions
permissible in a motor vehicle liability insurance policy:
1. Providing that, regardless of the number of policies, persons, or vehicles
involved, the limits for uninsured or underinsured motorist coverage under the
policy may not be added to the limits for similar coverage applying to other motor
vehicles to determine an overall limit of coverage available for a person in any one
accident.
2. Providing that the maximum amount of uninsured or underinsured motorist
coverage available for bodily injury or death suffered by a person not using a motor
vehicle in an accident (such as a pedestrian) is the highest single limit of uninsured
or underinsured motorist coverage for any vehicle with respect to which the person
is insured at the time of the accident.
3. Providing that the maximum amount of medical payments coverage
available for bodily injury or death suffered by a person not using a motor vehicle in
an accident is the highest single limit of medical payments coverage for any vehicle
with respect to which the person is insured at the time of the accident.
4. Providing that the limits under the policy for uninsured or underinsured
motorist coverage for bodily injury or death resulting from an accident shall be
reduced by amounts paid or payable by or on behalf of a person or organization that
is legally responsible for the bodily injury or death; amounts paid or payable under
any worker's compensation law; or amounts paid or payable under any disability
benefits laws.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB525,5,113
121.555
(2) (a)
Insurance. If the vehicle is owned or leased by a school or a
4school bus contractor, or is a vehicle authorized under sub. (1) (b), it shall comply with
5s. 121.53. If the vehicle is transporting 9 or
less
fewer persons in addition to the
6operator and is not owned or leased by a school or by a school bus contractor, it shall
7be insured by a policy providing property damage
coverage with a limit of not less
8than $10,000 and bodily injury liability coverage with limits
, as of the policy's
9effective date, equal to or greater than the minimum liability limits, as defined in s.
10344.01 (2) (am) of not less than $25,000 for each person, and, subject to the limit for
11each person, a total limit of not less than $50,000 for each accident.
AB525,6,618
344.01
(2) (d) "Proof of financial responsibility" or "proof of financial
19responsibility for the future" means proof of ability to respond in damages for
20liability on account of accidents occurring subsequent to the effective date of such
21proof, arising out of the maintenance or use of a motor vehicle
, in
an the amount
, as
1of
the date that proof is furnished to the department, equal to or greater than the
2minimum liability limits $25,000 because of bodily injury to or death of one person
3in any one accident and, subject to that limit for one person, in the amount of $50,000
4because of bodily injury to or death of 2 or more persons in any one accident and in
5the amount of $10,000 because of injury to or destruction of property of others in any
6one accident.
AB525, s. 6
9Section
6. 344.15 (1) (intro.), (a) and (b) of the statutes, as affected by
2009
10Wisconsin Act 28, are consolidated, renumbered 344.15 (1) and amended to read:
AB525,6,2211
344.15
(1) No policy or bond is effective under s. 344.14 unless
all of the
12following apply: (a) The policy or bond is issued by an insurer authorized to do an
13automobile liability or surety business in this state, except as provided in sub. (2)
.
14(b) The limits of liability under the, or unless the policy or bond
, as of the date of the
15accident, are equal to or greater than the minimum liability limits
is subject, if the
16accident has resulted in bodily injury or death, to a limit, exclusive of interest and
17costs, of not less than $25,000 because of bodily injury to or death of one person in
18any one accident and, subject to that limit for one person, to a limit of not less than
19$50,000 because of bodily injury to or death of 2 or more persons in any one accident
20and, if the accident has resulted in injury to or destruction of property, to a limit of
21not less than $10,000 because of injury to or destruction of property of others in any
22one accident.
AB525,7,9
1344.33
(2) Motor vehicle liability policy. (intro.) A motor vehicle policy of
2liability insurance shall insure the person named therein using any motor vehicle
3with the express or implied permission of the owner, or shall insure any motor vehicle
4owned by the named insured and any person using such motor vehicle with the
5express or implied permission of the named insured, against loss from the liability
6imposed by law for damages arising out of the maintenance or use of the motor
7vehicle within the United States of America or the Dominion of Canada, subject to
8the
minimum liability following limits
, exclusive of interest and costs, with respect
9to each such motor vehicle
.:
AB525, s. 8
10Section
8. 344.33 (2) (a) of the statutes is created to read:
AB525,7,1311
344.33
(2) (a) Twenty-five thousand dollars because of bodily injury to or death
12of one person in any one accident and in the amount of $10,000 because of injury to
13or destruction of property of others in any one accident.
AB525, s. 9
14Section
9. 344.33 (2) (b) of the statutes is created to read:
AB525,7,1615
344.33
(2) (b) Subject to the limit under par. (a) for one person, $50,000 because
16of bodily injury to or death of 2 or more persons in any one accident.
AB525, s. 10
17Section
10. 344.33 (2) (c) of the statutes is created to read:
AB525,7,1918
344.33
(2) (c) Ten thousand dollars because of injury to or destruction of
19property of others in any one accident.
AB525,8,422
344.55
(1) (intro.) No motor vehicle may be used as a human service vehicle
23unless a policy of bodily injury and property damage liability insurance, issued by
24an insurer authorized to transact business in this state, is maintained thereon. The
25policy shall provide
property damage liability coverage with a limit of not less than
1$10,000. The policy also shall provide bodily injury liability coverage with limits
, as
2of the policy's effective date, of at least the minimum liability limits or, if greater, of
3not less than $75,000 for each person and, subject to such limit for each person, total
4limits as follows:
AB525,8,87
631.43
(3) Exception. Subsection (1) does not affect the rights of insurers to
8exclude, limit
, or
restrict reduce coverage under s. 632.32 (5) (b)
or, (c) or
(f) to (j).
AB525,9,43
632.32
(4) (title)
Required uninsured motorist, underinsured motorist, and
4medical payments coverages.
AB525,9,77
632.32
(4) (a) (title)
Uninsured motorist.
AB525,9,1510
632.32
(4) (intro.) Every policy of insurance subject to this section that insures
11with respect to any motor vehicle registered or principally garaged in this state
12against loss resulting from liability imposed by law for bodily injury or death suffered
13by any person arising out of the ownership, maintenance, or use of a motor vehicle
14shall contain therein or supplemental thereto
the following provisions
for all of the
15following coverages:
AB525,9,2318
632.32
(4) (a) 1.
Excluding a policy written by a town mutual organized under
19ch. 612, uninsured motorist coverage For the protection of persons injured who are
20legally entitled to recover damages from owners or operators of uninsured motor
21vehicles because of bodily injury, sickness, or disease, including death resulting
22therefrom, in limits of at least
$100,000 $25,000 per person and
$300,000 $50,000 23per accident.
AB525,10,2
1632.32
(4) (a) 2. In this paragraph, "uninsured motor vehicle" also includes any
2of the following:
AB525,10,43
a. An insured motor vehicle if before or after the accident the liability insurer
4of the motor vehicle is declared insolvent by a court of competent jurisdiction.
AB525,10,55
b. An unidentified motor vehicle involved in a hit-and-run accident.
AB525,10,1910
632.32
(4) (b)
Medical payments.
Medical To indemnify for medical payments
11coverage, or chiropractic payments or both in the amount of at least
$10,000 $1,000 12per person
for the protection of all persons using the insured motor vehicle from
13losses resulting from bodily injury or death. The named insured may reject the
14coverage. If the named insured rejects the coverage, it need not be provided in a
15subsequent renewal policy issued by the same insurer unless the insured requests
16it in writing. Under the medical or chiropractic payments coverage, the insurer shall
17be subrogated to the rights of its insured to the extent of its payments. Coverage
18written under this
subdivision paragraph may be excess coverage over any other
19source of reimbursement to which the insured person has a legal right.
AB525,11,224
632.32
(4) (a) 3.
Unless an insurer waives the right to subrogation, insurers 25Insurers making payment under
any of the coverages under this subsection the
1uninsured motorists' coverage shall, to the extent of the payment, be subrogated to
2the rights of their insureds.
AB525,11,145
632.32
(4m) Underinsured motorist coverage. (a) An insurer writing policies
6that insure with respect to a motor vehicle registered or principally garaged in this
7state against loss resulting from liability imposed by law for bodily injury or death
8suffered by a person arising out of the ownership, maintenance, or use of a motor
9vehicle shall provide to one insured under each such insurance policy that goes into
10effect after October 1, 1995, that is written by the insurer and that does not include
11underinsured motorist coverage written notice of the availability of underinsured
12motorist coverage, including a brief description of the coverage. An insurer is
13required to provide the notice required under this subdivision only one time and in
14conjunction with the delivery of the policy.