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2011 - 2012 LEGISLATURE
January 14, 2011 - Introduced by Representatives Nygren, Petersen, Steineke,
Klenke, Knilans, Krug, Petryk, Rivard, Endsley, Tranel, Marklein,
Severson, Wynn, Bernier, Tiffany, Jacque, Weininger, Knudson, T. Larson,
Kooyenga, Farrow, Kuglitsch, Litjens, August, Kapenga, Thiesfeldt,
Williams, Honadel, Ripp, Nerison, J. Fitzgerald, Kramer, Suder, Vos, Knodl,
Ballweg, Mursau, Murtha, Kestell, Meyer, Petrowski, Tauchen, Brooks, A.
Ott, J. Ott, Bies, Van Roy, Kaufert, Stone, Kerkman, LeMahieu, Strachota,
Kleefisch, Nass, Spanbauer, Pridemore, Ziegelbauer
and Fields,
cosponsored by Senators Lasee, Lazich, Taylor, Darling, Hopper, Wanggaard,
Galloway, Kapanke, Leibham, Harsdorf, Kedzie
and Vinehout. Referred to
Committee on Insurance.
AB4,1,9 1An Act to repeal 227.01 (13) (zz), 344.01 (2) (am), 344.11, 632.32 (4r), 632.32 (6)
2(f) and 632.355; to renumber and amend 344.33 (2), 632.32 (6) (d), 632.32 (6)
3(e) and 632.32 (6) (g); to consolidate, renumber and amend 344.15 (1)
4(intro.), (a) and (b); to amend 121.555 (2) (a), 344.01 (2) (d), 344.55 (1) (intro.),
5631.43 (3), 632.32 (2) (e) 3., 632.32 (2) (g) (intro.), 632.32 (4) (a) 1., 632.32 (4) (a)
62m., 632.32 (4) (a) 3m. and 632.32 (4) (d); to repeal and recreate 632.32 (2)
7(g) 2.; and to create 344.33 (2) (a), 344.33 (2) (b), 344.33 (2) (c), 632.32 (2) (ac)
8and 632.32 (2) (bh) of the statutes; relating to: automobile insurance coverage
9limits, permissible policy provisions, and proof of financial responsibility.
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, exclusive of interest and costs, 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 decreases the minimum limits required under a policy that is
acceptable proof of financial responsibility to $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. The bill also eliminates inflation adjustments for these limits
and eliminates statutory language that these limits are determined exclusive of
interest and costs.
This bill does not eliminate the provisions of the biennial budget act that, as of
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
$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
Before the biennial budget act, 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, although an insured could reject medical payments
coverage. 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 minimum limits for uninsured motorist coverage that motor vehicle
liability insurance policies must include, except for those written by town mutuals,
is $100,000 per person and $300,000 per accident and the minimum limits for
medical payments coverage that those policies must include is $10,000. This bill
changes the required minimum limits back to $25,000 per person and $50,000 per
accident for uninsured motorist coverage and back to $1,000 per person for medical
payments coverage.
Underinsured motorist coverage
Before the biennial budget act, motor vehicle liability insurance policies did not
have to include underinsured motorist coverage but insurers were required to
provide written notice of the availability of that coverage and, 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 liability limits that are less than the amount needed to fully compensate the
insured for his or her damages. The bill retains the requirement that underinsured
motorist coverage be provided in every motor vehicle liability insurance policy,
except for those written by town mutuals, and reduces the minimum required limits
to $50,000 per person and $100,000 per accident. Also, the bill modifies the definition
of an underinsured motor vehicle to one with liability limits that are lower than the
limits of the insured's underinsured motorist coverage. The effect of this change is
that, regardless of the extent of the insured's damages, there is no coverage under
the insured's underinsured motorist coverage if the other vehicle involved in the
accident has liability limits at least as great as the limits of the insured's
underinsured motorist coverage.
Umbrella and excess liability insurance policies
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. 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. Current law also excludes umbrella and excess liability policies from the
statutory requirements related to the types of coverage that must be provided in a
policy that covers motor vehicles and the minimum limits required for those types
of coverage (coverage and limits requirements).
The bill restores former law by eliminating the requirement that an insurer
writing an umbrella or excess liability policy must make a written offer of uninsured
motorist coverage and underinsured motorist coverage and the requirement that a
court must reform such a policy to include either coverage. However, the bill retains
the current law provision that umbrella and excess liability policies are not subject
to the coverage and limits requirements. In addition, the bill also excludes
commercial liability policies from the coverage and limits requirements and defines
those policies as ones that are intended principally to provide primary coverage for
an insured's general liability arising out of its business or other commercial activities
but that include coverage for the insured's liability arising out of the ownership,
maintenance, or use of a motor vehicle as one component of the policy.
Miscellaneous motor vehicle insurance provisions
Current law, as a result of provisions in the biennial budget act, defines an
uninsured motor vehicle as including not only an unidentified motor vehicle involved
in a hit-and-run accident with an insured but also an unidentified motor vehicle
that is simply involved in an accident with the insured, provided that an independent
third party provides evidence in support of the unidentified motor vehicle's
involvement in the accident. The bill replaces that part of the definition of an
uninsured motor vehicle with a "phantom motor vehicle," which is defined as one that
is involved in an accident with the insured, that does not make contact with the
insured or a vehicle the insured is occupying at the time of the accident, and for which
neither the owner nor the operator can be ascertained. Additionally, the facts of the
accident must be corroborated by competent evidence provided by someone other
than the insured or any other person who makes an underinsured motorist claim as
a result of the accident, the accident must be reported to the police or other
authorities within 72 hours, and the insured or his or her legal representative must,
within 30 days, file with the insurer a statement under oath that the insured has a
cause of action for damages against a person whose identity cannot be ascertained
and that sets forth the facts supporting the statement. The bill also excludes a motor
vehicle that is owned by a governmental unit from the definition of an uninsured
motor vehicle.
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 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.
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.
Current law provides that an insurer may not place an applicant for motor
vehicle insurance in a high-risk category on the basis that the applicant has not
previously had motor vehicle insurance. The bill removes this prohibition.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB4, s. 1 1Section 1. 121.555 (2) (a) of the statutes is amended to read:
AB4,5,102 121.555 (2) (a) Insurance. If the vehicle is owned or leased by a school or a
3school bus contractor, or is a vehicle authorized under sub. (1) (b), it shall comply with
4s. 121.53. If the vehicle is transporting 9 or less fewer persons in addition to the
5operator and is not owned or leased by a school or by a school bus contractor, it shall
6be insured by a policy providing property damage coverage with a limit of not less
7than $10,000
and bodily injury liability coverage with limits, as of the policy's
8effective date, equal to or greater than the minimum liability limits, as defined in s.
9344.01 (2) (am)
of not less than $25,000 for each person, and, subject to the limit for
10each person, a total limit of not less than $50,000 for each accident
.
AB4, s. 2 11Section 2. 227.01 (13) (zz) of the statutes is repealed.
AB4, s. 3
1Section 3. 344.01 (2) (am) of the statutes is repealed.
AB4, s. 4 2Section 4. 344.01 (2) (d) of the statutes is amended to read:
AB4,6,123 344.01 (2) (d) "Proof of financial responsibility" or "proof of financial
4responsibility for the future" means proof of ability to respond in damages for
5liability on account of accidents occurring subsequent to the effective date of such
6proof, arising out of the maintenance or use of a motor vehicle, in an the amount, as
7of the date that proof is furnished to the department, equal to or greater than the
8minimum liability limits
$25,000 because of bodily injury to or death of one person
9in any one accident and, subject to that limit for one person, in the amount of $50,000
10because of bodily injury to or death of 2 or more persons in any one accident and in
11the amount of $10,000 because of injury to or destruction of property of others in any
12one accident
.
AB4, s. 5 13Section 5. 344.11 of the statutes is repealed.
AB4, s. 6 14Section 6. 344.15 (1) (intro.), (a) and (b) of the statutes are consolidated,
15renumbered 344.15 (1) and amended to read:
AB4,7,216 344.15 (1) No policy or bond is effective under s. 344.14 unless all of the
17following apply: (a) The policy or bond is
issued by an insurer authorized to do an
18automobile liability or surety business in this state, except as provided in sub. (2).
19(b) The limits of liability under the
, or unless the policy or bond, as of the date of the
20accident, are equal to or greater than the minimum liability limits
is subject, if the
21accident has resulted in bodily injury or death, to a limit of not less than $25,000
22because of bodily injury to or death of one person in any one accident and, subject to
23that limit for one person, to a limit of not less than $50,000 because of bodily injury
24to or death of 2 or more persons in any one accident and, if the accident has resulted

1in injury to or destruction of property, to a limit of not less than $10,000 because of
2injury to or destruction of property of others in any one accident
.
AB4, s. 7 3Section 7. 344.33 (2) of the statutes is renumbered 344.33 (2) (intro.) and
4amended to read:
AB4,7,125 344.33 (2) Motor vehicle liability policy. (intro.) A motor vehicle policy of
6liability insurance shall insure the person named therein using any motor vehicle
7with the express or implied permission of the owner, or shall insure any motor vehicle
8owned by the named insured and any person using such motor vehicle with the
9express or implied permission of the named insured, against loss from the liability
10imposed by law for damages arising out of the maintenance or use of the motor
11vehicle within the United States of America or the Dominion of Canada, subject to
12the minimum liability following limits with respect to each such motor vehicle.:
AB4, s. 8 13Section 8. 344.33 (2) (a) of the statutes is created to read:
AB4,7,1514 344.33 (2) (a) Twenty-five thousand dollars because of bodily injury to or death
15of one person in any one accident.
AB4, s. 9 16Section 9. 344.33 (2) (b) of the statutes is created to read:
AB4,7,1817 344.33 (2) (b) Subject to the limit under par. (a) for one person, $50,000 because
18of bodily injury to or death of 2 or more persons in any one accident.
AB4, s. 10 19Section 10. 344.33 (2) (c) of the statutes is created to read:
AB4,7,2120 344.33 (2) (c) Ten thousand dollars because of injury to or destruction of
21property of others in any one accident.
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