LRB-4221/1
PJK&ARG:jld:rs
2009 - 2010 LEGISLATURE
March 26, 2010 - Introduced by Senators Vinehout, Holperin and Coggs,
cosponsored by Representatives Van Akkeren, Nygren, Vruwink,
Ziegelbauer, Van Roy, Ballweg, A. Ott
and LeMahieu. Referred to Committee
on Judiciary, Corrections, Insurance, Campaign Finance Reform, and
Housing.
SB646,1,8 1An Act to repeal 227.01 (13) (zz), 344.01 (2) (am) 5., 344.11 and 632.32 (4r); to
2renumber and amend
632.32 (6) (d), 632.32 (6) (e) and 632.32 (6) (f); to
3consolidate, renumber and amend
632.355 (intro.) (except 632.355 (title))
4and (1); to amend 631.36 (5) (b) (intro.), 631.43 (3), 632.32 (1), 632.32 (2) (cm),
5632.32 (2) (e) 2., 632.32 (2) (e) 3., 632.32 (2) (g) 3., 632.32 (4) (a) (intro.), 632.32
6(4) (a) 1., 632.32 (4) (a) 3m., 632.32 (4) (bc) and 632.355 (title); and to create
7631.36 (5) (b) 3., 632.32 (2) (bc), 632.32 (4) (d) and 632.355 (2) of the statutes;
8relating to: motor vehicle insurance and proof of financial responsibility.
Analysis by the Legislative Reference Bureau
Motor vehicle policy liability limits
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 determined
by DOT to be 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 liability
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 by DOT, and published by DOT, at five-year intervals.
Also under current law, beginning on June 1, 2010, subject to certain
exceptions, a person cannot operate a motor vehicle in this state unless the owner or
operator of the vehicle has in effect a motor vehicle liability policy with respect to the
vehicle being operated. The policy must provide coverage in at least the minimum
liability limits specified immediately above.
This bill eliminates DOT's inflation adjustment of required minimum liability
limits. The bill eliminates item 3., above, so that, for purposes of both mandatory
liability insurance and proof of financial responsibility, the minimum liability limits
after January 1, 2010, remain as specified in item 2., above.
Miscellaneous motor vehicle insurance provisions
This bill makes a number of changes to the current law provisions that relate
to motor vehicle insurance policies and umbrella and excess liability policies,
including the following:
1. Current law, as a result of provisions in the 2009-11 biennial budget act
(budget act), makes a number of formerly permissible provisions prohibited in a
motor vehicle liability insurance policy. The bill restores some of former law by
making the following provisions permissible in a motor vehicle liability insurance
policy:
a. Providing that, regardless of the number of policies, persons, or vehicles
involved, the limits for any 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.
b. 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.
c. 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.
2. 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. 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. As a result of provisions in the 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 per person. The bill reduces the
minimum required limits for uninsured motorist coverage to $50,000 per person and
$100,000 per accident and eliminates any minimum required limit for medical
payments coverage.
3. 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. 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. 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. Current law, as a result of provisions in the budget act, requires every
motor vehicle liability insurance policy, except for those written by town mutuals, to
include underinsured motorist coverage coverage in limits of at least $100,000 per
person and $300,000 per accident. The bill allows an insured to reject underinsured
motorist coverage, which is the case under both former and current law for medical
payments coverage.
4. Current law 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
defines an underinsured motor vehicle as one that is involved in an accident with an
insured person who has underinsured motorist coverage and which vehicle, at the
time of an accident, was covered by a motor vehicle liability insurance policy with
limits that are less than the limits of that insured person's underinsured motorist
coverage. The definition also includes a motor vehicle that is owned or operated by
a person who has furnished proof of financial responsibility or who is self-insured
under any other applicable motor vehicle law but with limits that are less than the
limits of the insured person's underinsured motorist coverage.
5. Under current law, an uninsured motor vehicle includes an unidentified
motor vehicle involved in a hit-and-run accident with the insured person. The bill
specifies that an unidentified motor vehicle involved in a hit-and-run accident with

the insured person is an uninsured motor vehicle if the vehicle makes contact with
the insured person or the vehicle that the insured person is occupying.
6. Current law, as a result of provisions in the 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. 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 eliminates the requirement that an insurer writing an umbrella or excess
liability policy make a written offer of uninsured motorist coverage and
underinsured motorist coverage. In addition, the bill explicitly excludes umbrella
and excess liability policies from the requirements that apply to motor vehicle
insurance policies with respect to uninsured, underinsured, and medical payments
coverage.
7. Current law, as a result of provisions in the budget act, prohibits an insurer
from placing an applicant for insurance in a high-risk category on the basis that the
applicant has not previously had motor vehicle insurance. The bill provides that this
does not apply to a person who applies for motor vehicle insurance on or after
January 1, 2011, and who, at the time of application, is in violation of the
requirement beginning June 1, 2010, to have motor vehicle liability insurance as a
condition for operating a motor vehicle.
8. Under current law, an insurer must provide at least 60 days' notice to an
insured if the insured's policy will be renewed with increased premiums. The bill
provides that this does not apply if the premium increase results from a statutory or
regulatory change or a change based on case law.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB646, s. 1 1Section 1. 227.01 (13) (zz) of the statutes, as created by 2009 Wisconsin Act
228
, is repealed.
SB646, s. 2 3Section 2. 344.01 (2) (am) 5. of the statutes, as created by 2009 Wisconsin Act
428
, is repealed.
SB646, s. 3 5Section 3. 344.11 of the statutes, as created by 2009 Wisconsin Act 28, is
6repealed.
SB646, s. 4
1Section 4. 631.36 (5) (b) (intro.) of the statutes is amended to read:
SB646,5,42 631.36 (5) (b) Exception. (intro.) Paragraph (a) does not apply if the only
3change that is adverse to the policyholder is a premium increase and if either any of
4the following applies to the premium increase:
SB646, s. 5 5Section 5. 631.36 (5) (b) 3. of the statutes is created to read:
SB646,5,76 631.36 (5) (b) 3. The premium increase results from a statutory or regulatory
7change or a change based on case law.
SB646, s. 6 8Section 6. 631.43 (3) of the statutes, as affected by 2009 Wisconsin Act 28, is
9amended to read:
SB646,5,1110 631.43 (3) Exception. Subsection (1) does not affect the rights of insurers to
11exclude, limit, or restrict coverage under s. 632.32 (5) (b) or, (c), or (f) to (j).
SB646, s. 7 12Section 7. 632.32 (1) of the statutes is amended to read:
SB646,5,1613 632.32 (1) Scope. Except as otherwise provided, this section applies to every
14motor vehicle liability policy of insurance issued or delivered in this state against the
15insured's liability for loss or damage resulting from accident caused by any motor
16vehicle, whether the loss or damage is to property or to a person.
SB646, s. 8 17Section 8. 632.32 (2) (bc) of the statutes is created to read:
SB646,5,1918 632.32 (2) (bc) "Motor vehicle liability policy" has the meaning given in s.
19344.61 (2).
SB646, s. 9 20Section 9. 632.32 (2) (cm) of the statutes, as created by 2009 Wisconsin Act 28,
21is amended to read:
SB646,5,2522 632.32 (2) (cm) "Umbrella or excess liability policy" means an insurance
23contract providing at least $1,000,000 of liability coverage per person or per
24occurrence in excess of certain required underlying motor vehicle liability insurance
25policy coverage or a specified amount of self-insured retention.
SB646, s. 10
1Section 10. 632.32 (2) (e) 2. of the statutes, as created by 2009 Wisconsin Act
228
, is amended to read:
SB646,6,73 632.32 (2) (e) 2. A At the time of the accident, a bodily injury liability insurance
4policy applies to the motor vehicle at the time of the accident or the owner or operator
5of the motor vehicle has furnished proof of financial responsibility for the future
6under subch. III of ch. 344 and it is in effect or is a self-insurer under another
7applicable motor vehicle law
.
SB646, s. 11 8Section 11. 632.32 (2) (e) 3. of the statutes, as created by 2009 Wisconsin Act
928
, is amended to read:
SB646,6,1310 632.32 (2) (e) 3. The limits under the bodily injury liability insurance policy or
11with respect to the proof of financial responsibility or self-insurance
are less than
12the amount needed to fully compensate the insured for his or her damages limits of
13the person's underinsured motorist coverage under subd. 1
.
SB646, s. 12 14Section 12. 632.32 (2) (g) 3. of the statutes, as created by 2009 Wisconsin Act
1528
, is amended to read:
SB646,6,1816 632.32 (2) (g) 3. An unidentified motor vehicle involved in a hit-and-run
17accident with the person that makes contact, in the accident, with the person or the
18vehicle that the person is occupying
.
SB646, s. 13 19Section 13. 632.32 (4) (a) (intro.) of the statutes, as affected by 2009 Wisconsin
20Act 28
, is amended to read:
SB646,7,221 632.32 (4) (a) (intro.) Every Except as provided in par. (d), every motor vehicle
22liability
policy of insurance subject to this section that insures with respect to any
23motor vehicle registered or principally garaged in this state against loss resulting
24from liability imposed by law for bodily injury or death suffered by any person arising

1out of the ownership, maintenance, or use of a motor vehicle shall contain therein or
2supplemental thereto provisions for all of the following coverages:
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