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:
632.32(4)(a)1.1. For the protection of persons injured who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death resulting therefrom, in limits of at least $25,000 per person and $50,000 per accident.
632.32(4)(a)2.
2. In this paragraph "uninsured motor vehicle" also includes:
632.32(4)(a)2.a.
a. An insured motor vehicle if before or after the accident the liability insurer of the motor vehicle is declared insolvent by a court of competent jurisdiction.
632.32(4)(a)2.b.
b. An unidentified motor vehicle involved in a hit-and-run accident.
632.32(4)(a)3.
3. Insurers making payment under the uninsured motorists' coverage shall, to the extent of the payment, be subrogated to the rights of their insureds.
632.32(4)(b)
(b)
Medical payments. To indemnify for medical payments or chiropractic payments or both in the amount of at least $1,000 per person for protection of all persons using the insured motor vehicle from losses resulting from bodily injury or death. The named insured may reject the coverage. If the named insured rejects the coverage, it need not be provided in a subsequent renewal policy issued by the same insurer unless the insured requests it in writing. Under the medical or chiropractic payments coverage, the insurer shall be subrogated to the rights of its insured to the extent of its payments. Coverage written under this paragraph may be excess coverage over any other source of reimbursement to which the insured person has a legal right.
632.32(4m)(a)1.1. An insurer writing policies that insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by a person arising out of the ownership, maintenance or use of a motor vehicle shall provide to one insured under each such insurance policy that goes into effect after October 1, 1995, that is written by the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this subdivision only one time and in conjunction with the delivery of the policy.
632.32(4m)(a)2.
2. An insurer under
subd. 1. shall provide to one insured under each insurance policy described in
subd. 1. that is in effect on October 1, 1995, that is written by the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this subdivision only one time and in conjunction with the notice of the first renewal of each policy occurring after 120 days after October 1, 1995.
632.32(4m)(b)
(b) Acceptance or rejection of underinsured motorist coverage by a person after being notified under
par. (a) need not be in writing. The absence of a premium payment for underinsured motorist coverage is conclusive proof that the person has rejected such coverage. The rejection of such coverage by the person notified under
par. (a) shall apply to all persons insured under the policy, including any renewal of the policy.
632.32(4m)(c)
(c) If a person rejects underinsured motorist coverage after being notified under
par. (a), the insurer is not required to provide such coverage under a policy that is renewed to the person by that insurer unless an insured under the policy subsequently requests such underinsured motorist coverage in writing.
632.32(4m)(d)
(d) If an insured who is notified under
par. (a) 1. accepts underinsured motorist coverage, the insurer shall include the coverage under the policy just delivered to the insured in limits of at least $50,000 per person and $100,000 per accident. For any insured who accepts the coverage after notification under
par. (a) 2., the insurer shall include the coverage under the renewed policy in limits of at least $50,000 per person and $100,000 per accident.
632.32(5)(a)(a) A policy may limit coverage to use that is with the permission of the named insured or, if the insured is an individual, to use that is with the permission of the named insured or an adult member of that insured's household other than a chauffeur or domestic servant. The permission is effective even if it violates
s. 343.45 (2) and even if the use is not authorized by law.
632.32(5)(b)
(b) If the policy is issued to anyone other than a motor vehicle handler, it may limit the coverage afforded to a motor vehicle handler or its officers, agents or employees to the limits under
s. 344.01 (2) (d) and to instances when there is no other valid and collectible insurance with at least those limits whether the other insurance is primary, excess or contingent.
632.32(5)(c)
(c) If the policy is issued to a motor vehicle handler, it may restrict coverage afforded to anyone other than the motor vehicle handler or its officers, agents or employees to the limits under
s. 344.01 (2) (d) and to instances when there is no other valid and collectible insurance with at least those limits whether the other insurance is primary, excess or contingent.
632.32(5)(d)
(d) If a motor vehicle covered by the policy is sold or transferred, the purchaser or transferee is not an additional insured unless the consent of the insurer is endorsed on the policy.
632.32(5)(e)
(e) A policy may provide for exclusions not prohibited by
sub. (6) or other applicable law. Such exclusions are effective even if incidentally to their main purpose they exclude persons, uses or coverages that could not be directly excluded under
sub. (6) (b).
632.32(5)(f)
(f) A policy may provide that regardless of the number of policies involved, vehicles involved, persons covered, claims made, vehicles or premiums shown on the policy or premiums paid 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 the limit of insurance coverage available for bodily injury or death suffered by a person in any one accident.
632.32(5)(g)
(g) A policy may provide that the maximum amount of uninsured or underinsured motorist coverage available for bodily injury or death suffered by a person who was not using a motor vehicle at the time of an accident is the highest single limit of uninsured or underinsured motorist coverage, whichever is applicable, for any motor vehicle with respect to which the person is insured.
632.32(5)(h)
(h) A policy may provide that the maximum amount of medical payments coverage available for bodily injury or death suffered by a person who was not using a motor vehicle at the time of an accident is the highest single limit of medical payments coverage for any motor vehicle with respect to which the person is insured.
632.32(5)(i)
(i) A policy may provide that the limits under the policy for uninsured or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by any of the following that apply:
632.32(5)(i)1.
1. Amounts paid by or on behalf of any person or organization that may be legally responsible for the bodily injury or death for which the payment is made.
632.32(5)(i)2.
2. Amounts paid or payable under any worker's compensation law.
632.32(5)(i)3.
3. Amounts paid or payable under any disability benefits laws.
632.32(5)(j)
(j) A policy may provide that any coverage under the policy does not apply to a loss resulting from the use of a motor vehicle that meets all of the following conditions:
632.32(5)(j)1.
1. Is owned by the named insured, or is owned by the named insured's spouse or a relative of the named insured if the spouse or relative resides in the same household as the named insured.
632.32(5)(j)2.
2. Is not described in the policy under which the claim is made.
632.32(5)(j)3.
3. Is not covered under the terms of the policy as a newly acquired or replacement motor vehicle.
632.32(6)(a)(a) No policy issued to a motor vehicle handler may exclude coverage upon any of its officers, agents or employees when any of them are using motor vehicles owned by customers doing business with the motor vehicle handler.
632.32(6)(b)
(b) No policy may exclude from the coverage afforded or benefits provided:
