632.102(5)
(5) Immunity for insurer. No cause of action may arise against and no liability may be imposed upon an insurer or an agent or employee of an insurer for paying, withholding or transferring all or any portion of a final settlement as provided in
ss. 632.10 to
632.104.
632.103
632.103
Procedure for payment of withheld funds. 632.103(1)(a)(a) To qualify for reimbursement of expenses under
sub. (2), the 1st class city must do any of the following:
632.103(1)(a)1.
1. Commence proceedings under
s. 66.0413,
254.595 or
823.04 or under a local ordinance relating to demolition or abatement of nuisances, with respect to the building or other structure for which the funds are withheld.
632.103(1)(a)2.
2. Obtain a release signed by the named insured consenting to demolition of the building or other structure with respect to which the funds are withheld.
632.103(1)(b)
(b) The 1st class city shall commence proceedings under
par. (a) 1. or obtain the release under
par. (a) 2. after the occurrence of the loss to the building or other structure by fire or explosion but within 90 days after delivery of the notice of withholding under
s. 632.102 (3).
632.103(1)(c)
(c) When proceedings described in
par. (a) 1. are commenced, the 1st class city shall notify, in writing, the insurer, the named insured and any mortgagee or other lienholder identified in the notice of withholding under
s. 632.102 (3) (b) 2. that the proceedings are commenced.
632.103(1)(d)
(d) The 1st class city shall release all interest in the amount withheld under
s. 632.102 (2) and the insurer shall promptly pay that amount to the named insured and other interests named in the policy if any of the following occurs:
632.103(1)(d)1.
1. The 1st class city fails to commence proceedings described in
par. (a) 1. or obtain a release described in
par. (a) 2. within the period provided in
par. (b).
632.103(1)(d)2.
2. The 1st class city fails to notify the insurer as provided in
par. (c).
632.103(2)(a)(a) If the 1st class city satisfies
sub. (1) (a) and
(b) and, if applicable, notifies the insurer as required in
sub. (1) (c), the insurer shall promptly upon receiving the statement under
par. (b) deliver to the 1st class city funds withheld from the named insured's final settlement under
s. 632.102 (2), to the extent necessary to reimburse the 1st class city for any of the following expenses:
632.103(2)(a)1.
1. Costs incurred in the course of enforcing
ss. 66.0413 and
66.0427 or a local ordinance relating to demolition, with respect to the building or other structure for which the funds are withheld.
632.103(2)(a)2.
2. Costs incurred in acting in accordance with a release signed by the named insured consenting to demolition of the building or other structure with respect to which the funds are withheld.
632.103(2)(a)3.
3. Costs incurred in abating a public nuisance under
s. 254.595 or
823.04 or under a local ordinance relating to abating a public nuisance, with respect to the building or other structure for which the funds are withheld.
632.103(2)(a)4.
4. Reasonable administrative expenses incurred in connection with activities described in
subds. 1. to
3., including but not limited to expenses for inspection, clerical, supervisory and attorney services.
632.103(2)(b)
(b) The insurer may not release any withheld funds to the 1st class city under
par. (a) unless the 1st class city delivers to the insurer and the named insured an itemized statement of the actual costs incurred under
par. (a) 1. to
4.
632.103(2)(c)
(c) The insurer shall promptly deliver to the named insured and other interests named in the policy any portion of the withheld funds that are not released to the 1st class city under
par. (a).
632.103(3)
(3) Release to named insured. Except as provided in
sub. (2), the insurer shall promptly deliver to the named insured and other interests named in the policy the funds withheld from the named insured's final settlement under
s. 632.102 (2) if the 1st class city delivers a notice to the insurer that the building inspection official of the 1st class city, or other person who is authorized by the 1st class city's governing body to represent the 1st class city, has inspected the insured real property and verifies any of the following:
632.103(3)(a)
(a) That the damaged or destroyed portions of the building or other structure with respect to which the funds are withheld have been repaired or replaced in compliance with applicable building and safety standards, except to the extent that the withheld funds are needed to complete repair or replacement.
632.103(3)(b)
(b) That the damaged or destroyed building or other structure with respect to which the funds are withheld and all remnants of the building or other structure have been removed from the land on which the building or other structure was situated and the site has been restored to a dust-free and erosion-free condition in compliance with applicable building and safety standards.
632.104
632.104
Funds released to mortgagee. 632.104(1)
(1)
First mortgage in default. The insurer shall release to a mortgagee funds withheld under
s. 632.102, in an amount and within the period provided in
sub. (2), if all of the following conditions are satisfied:
632.104(1)(a)
(a) The mortgagee holds a first mortgage on the real property with respect to which the funds are being withheld, and the mortgage is in default.
632.104(1)(b)
(b) The mortgage was executed before March 1, 1991.
632.104(1)(c)
(c) The mortgagee delivers to the insurer a written request for release of the funds within 15 days after delivery of the notice of withholding under
s. 632.102 (3).
632.104(2)
(2) Amount released; timing. If
sub. (1) is satisfied, the insurer shall release to the mortgagee all or any portion of the funds withheld with respect to the mortgaged property as is necessary to satisfy an outstanding first lien mortgage of the mortgagee. The insurer shall release the funds within 10 days after receiving the request under
sub. (1) (c).
632.104 History
History: 1989 a. 347.
SURETY INSURANCE
632.14
632.14
Bonds need not be under seal. No suretyship obligation need be under seal unless a seal is required by the applicable federal law or law of another jurisdiction.
632.14 History
History: 1975 c. 375.
632.17
632.17
Validity of surety bonds. 632.17(1)
(1)
Failure to file certificate. No instrument executed by an insurer authorized to do a surety business is ineffective because of failure to file the certificate of its authority to do business in this state or a certified copy thereof; but the officer with whom any instrument so executed has been filed or any person who might claim the benefit thereof may by written notice require the person filing the instrument to have a certified copy of the certificate of authority filed with the officer, and unless the copy is filed within 8 days after receipt of the notice the instrument does not satisfy the requirement that the instrument be supplied.
632.17(2)
(2) Satisfaction of obligations to provide surety. An undertaking in appropriate terms issued by an insurer authorized to do a surety business satisfies and is complete compliance with any authorization or requirement in the law of this state respecting surety bonds, undertakings or other similar obligations, and shall be accepted as such by any official authorized to receive or empowered to require such an undertaking, subject to
sub. (1).
632.17 History
History: 1975 c. 375.
632.18
632.18
Rustproofing warranties insurance. A policy of insurance to cover a warranty, as defined in
s. 100.205 (1) (g), shall fully cover the financial integrity of the warranty.
632.18 History
History: 1985 a. 29.
LIABILITY INSURANCE IN GENERAL
632.22
632.22
Required provisions of liability insurance policies. Every liability insurance policy shall provide that the bankruptcy or insolvency of the insured shall not diminish any liability of the insurer to 3rd parties and that if execution against the insured is returned unsatisfied, an action may be maintained against the insurer to the extent that the liability is covered by the policy.
632.22 History
History: 1975 c. 375.
632.23
632.23
Prohibited exclusions in aircraft insurance policies. No policy covering any liability arising out of the ownership, maintenance or use of an aircraft, may exclude or deny coverage because the aircraft is operated in violation of air regulation, whether derived from federal or state law or local ordinance.
632.23 History
History: 1975 c. 375.
632.24
632.24
Direct action against insurer. Any bond or policy of insurance covering liability to others for negligence makes the insurer liable, up to the amounts stated in the bond or policy, to the persons entitled to recover against the insured for the death of any person or for injury to persons or property, irrespective of whether the liability is presently established or is contingent and to become fixed or certain by final judgment against the insured.
632.24 History
History: 1975 c. 375.
632.24 Annotation
An excess-of-policy coverage clause in a reinsurance agreement constituted a liability insurance contract insuring against tortious failure to settle a claim. Ott v. All-Star Ins. Corp.
99 Wis. 2d 635,
299 N.W.2d 839 (1981).
632.24 Annotation
Recovery limitations applicable to an insured municipality likewise applied to its insurer, notwithstanding higher policy limits and s. 632.24. Gonzalez v. City of Franklin,
137 Wis. 2d 109,
430 N.W.2d 747 (1987).
632.24 Annotation
Insurers must plead and prove their policy limits prior to a verdict in order to restrict the judgment to the policy limits. Price v. Hart,
166 Wis. 2d 182,
480 N.W.2d 249 (Ct. App. 1991).
632.24 Annotation
This section does not apply to actions in which the principal on a bond under s. 344.36 causes injury. That section requires obtaining a judgment against the principal before an action may be brought against the surety. Vansguard v. Progressive Northern Insurance Co.
188 Wis. 2d 584,
525 N.W.2d 146 (Ct. App. 1994).
632.24 Annotation
There is neither a statutory nor a constitutional right to have all parties identified to a jury, but as a procedural rule, the court should in all cases apprise the jurors of the names of all the parties. Stoppleworth v. Refuse Hideway, Inc.
200 Wis. 2d 512,
546 N.W.2d 870 (Ct. App. 1996).
632.24 Annotation
A direct action against an insurer under this section is restricted by s. 631.01 to insurer's whose policy has been delivered or issued in Wisconsin. Kenison v. Wellington Insurance Co. 218 Wis. 2d700,
582 N.W.2d 69 (Ct. App. 1998).
632.24 Annotation
The federal compulsory counterclaim rule precluded an action against an insurer under the state direct action statute when an action directly against the insured was barred by rule. Fagnan v. Great Central Ins. Co.
577 F.2d 418 (1978).
632.24 Annotation
A breach of fiduciary duty was negligence for purposes of Wisconsin's direct action and direct liability statutes. Federal Deposit Insurance Co. v. MGIC Indemnity Corp.
462 F. Supp. 759 (1978).
632.24 Annotation
An insurer's failure to join in an insured motorist's petition to remove the case to federal court necessitated a remand to state court. Padden v. Gallaher,
513 F. Supp. 770 (1981).
632.25
632.25
Limited effect of conditions in employer's liability policies. Any condition in an employer's liability policy requiring compliance by the insured with rules concerning the safety of persons shall be limited in its effect in such a way that in the event of breach by the insured the insurer shall nevertheless be responsible to the injured person under
s. 632.24 as if the condition has not been breached, but shall be subrogated to the injured person's claim against the insured and be entitled to reimbursement by the latter.
632.25 History
History: 1975 c. 375.
632.25 Annotation
"Condition" as used in this section does not refer to exclusion. Bortz v. Merrimac Mutual Insurance Co.
92 Wis. 2d 865,
286 N.W.2d 16 (Ct. App. 1979).
632.26
632.26
Notice provisions. 632.26(1)(1)
Required provisions. Every liability insurance policy shall provide:
632.26(1)(a)
(a) That notice given by or on behalf of the insured to any authorized agent of the insurer within this state, with particulars sufficient to identify the insured, is notice to the insurer.
632.26(1)(b)
(b) That failure to give any notice required by the policy within the time specified does not invalidate a claim made by the insured if the insured shows that it was not reasonably possible to give the notice within the prescribed time and that notice was given as soon as reasonably possible.
632.26(2)
(2) Effect of failure to give notice. Failure to give notice as required by the policy as modified by
sub. (1) (b) does not bar liability under the policy if the insurer was not prejudiced by the failure, but the risk of nonpersuasion is upon the person claiming there was no prejudice.
632.26 History
History: 1979 c. 102.
632.26 Annotation
Legislative Council Note, 1979: Subsection (1) is former s. 632.32 (1), altered in 2 ways: (1) to extend its coverage to all liability policies; and (2) to change "may" to "shall". The subsection is divided into 2 paragraphs for clarity.
632.26 Annotation
The first change would strengthen the law. It is entirely new and seems a desirable extension.
632.26 Annotation
The second change corrects an error. The word "shall" was used in the fourth draft of the bill that ultimately became ch. 375, laws of 1975, and was not changed in the addendum to the fourth draft, dated July 14, 1975. Those documents went to the insurance laws revision committee and then to the legislative council for action. Nothing appears in the minutes of the committee's meeting of July 14, 1975 to indicate that a change was made. But in LRB-6218/1 of 1975, "may" appears instead of "shall". That error, which was probably inadvertent and the source of which we have not been able to trace, was carried on into the final enactment.
632.26 Annotation
Sub. (2) continues the second sentence of former s. 632.34 (4). Shifting it to s. 632.26, which is applicable to all liability insurance, broadens its application, but that seems desirable. The term "burden of proof" is changed to "risk of nonpersuasion" to tighten up the meaning. "Burden of proof" is a broad term that comprehends 2 separate concepts: (1) the burden of going forward with the evidence and (2) the burden of persuading the trier of fact, better termed the "risk of nonpersuasion". See McCormick, Evidence, (2nd ed.), at 784 n. 4 (1972). The statute is concerned with determining who wins when the totality of evidence is inconclusive, not with the burden of going forward, which ought to be settled on the basis of general principles. Indeed, since the insurer will have best (or the only) access to information about prejudice, it may be quite unfair to put the burden of going forward on the claimant.
632.26 Annotation
Subs. (1) (b) and (2) are related. The first is a required provision in the policy. The 2nd is a rule of law. It is preferable not to go too far in inserting excuses into the policy. Sub. (1) (b) encourages the insured not to give up automatically if notice is not timely given, but insertion of sub. (2) into the policy would arguably encourage an unduly long delay that might prejudice both parties. [Bill 146-S]
632.26 Annotation
When the insurer denied coverage within the time that the insured could have submitted her proofs in response to the insurer's request for more information, the insurer waived the defense of lack of notice.. Ehlers v. Colonial Penn Insurance Co.
81 Wis. 2d 64,
259 N.W.2d 718 (1977).
632.26 Annotation
The failure of policyholders to give notice to an underinsurer of a settlement between the insured and the tortfeasor does not bar underinsured motorist coverage in the absence of prejudice to the insurer. There is a rebuttable presumption of prejudice when there is a lack of notice, with the burden on the insured to prove by the greater weight of the evidence that the insurer was not prejudiced. Ranes v. American Family Mutual Insurance Co.
219 Wis. 2d 49,
580 N.W.2d 197 (1998).
AUTOMOBILE AND MOTOR VEHICLE INSURANCE
632.32
632.32
Provisions of motor vehicle insurance policies. 632.32(1)(1)
Scope. Except as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle, whether the loss or damage is to property or to a person.
632.32(2)(a)
(a) "Motor vehicle" means a self-propelled land motor vehicle designed for travel on public roads and subject to motor vehicle registration under
ch. 341. It includes trailers and semitrailers designed for use with such vehicles. It does not include farm tractors, well drillers, road machinery or snowmobiles.
632.32(2)(b)
(b) "Motor vehicle handler" means any of the following:
632.32(2)(b)3.
3. A repair shop, service station, storage garage or public parking place.
632.32(2)(c)
(c) "Using" includes driving, operating, manipulating, riding in and any other use.
632.32(3)
(3) Required provisions. Except as provided in
sub. (5), every policy subject to this section issued to an owner shall provide that:
632.32(3)(a)
(a) Coverage provided to the named insured applies in the same manner and under the same provisions to any person using any motor vehicle described in the policy when the use is for purposes and in the manner described in the policy.
632.32(3)(b)
(b) Coverage extends to any person legally responsible for the use of the motor vehicle.
632.32(4)
(4) Required uninsured motorist and medical payments coverages. Every policy of insurance subject to this section that insures with respect to any motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall contain therein or supplemental thereto provisions approved by the commissioner:
