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:
632.32(6)(b)1.
1. Persons related by blood, marriage or adoption to the insured.
632.32(6)(b)2.a.a. Any person who is a named insured or passenger in or on the insured vehicle, with respect to bodily injury, sickness or disease, including death resulting therefrom, to that person.
632.32(6)(b)2.b.
b. This subdivision, as it relates to passengers, does not apply to a policy of insurance for a motorcycle as defined in
s. 340.01 (32) or a moped as defined in
s. 340.01 (29m) if the motorcycle or moped is designed to carry only one person and does not have a seat for any passenger.
632.32(6)(b)3.
3. Any person while using the motor vehicle, solely for reasons of age, if the person is of an age authorized to drive a motor vehicle.
632.32(6)(b)4.
4. Any use of the motor vehicle for unlawful purposes, or for transportation of liquor in violation of law, or while the driver is under the influence of an intoxicant or a controlled substance or controlled substance analog under
ch. 961 or a combination thereof, under the influence of any other drug to a degree which renders him or her incapable of safely driving, or under the combined influence of an intoxicant and any other drug to a degree which renders him or her incapable of safely driving, or any use of the motor vehicle in a reckless manner. In this subdivision, "drug" has the meaning specified in
s. 450.01 (10).
632.32(6)(c)
(c) No policy may limit the time for giving notice of any accident or casualty covered by the policy to less than 20 days.
632.32 Annotation
Legislative Council Note, 1979: Sub. (1) retains the scope portion of former sub. (1), but the notice provision of former sub. (1) is transferred to new s. 632.26 and broadened to apply to all liability insurance.
632.32 Annotation
Sub. (2) (b) continues former sub. (2) (a); pars. (a) and (c) are new definitions in this place, though par. (a) tracks the language of s. 344.01 (2) (b). It would be possible to sharpen up the definition of motor vehicle, though that can only be done on the basis of a policy determination of what policies should be subject to this section. The exact delimitation of the affected class of policies is of less importance than if the section were mandating insurance or purported to change rules of law.
632.32 Annotation
Sub. (4) continues former sub. (3) and former s. 632.34 (5) with major editorial changes but without intended change of meaning except to add an unidentified hit-run vehicle as an uninsured vehicle. A precise definition of hit-and-run is not necessary for in the rare case where a question arises the court can draw the line.
632.32 Annotation
Sub. (5) continues the permitted provisions of former sub. (2) (b). Par. (d) continues a sentence of former s. 632.32 (2) (b), relocated in relation to other provisions to make its application clearer.
632.32 Annotation
Sub. (5) (e) deals with a latent ambiguity in former s. 204.34, carried forward into s. 632.34, which was picked up and noticed by the Wisconsin Supreme Court in Davison v. Wilson (1975),
71 Wis. 2d 630. The court suggested (at p. 641) that the section should be the subject of a clarifying amendment. The same ambiguity was dealt with by the court in Dahm v. Employers Mutual Liability Insurance Company of Wisconsin (1976),
74 Wis. 2d 123. The resolution of the ambiguity in par. (e) is believed to represent the probable intention of the legislature in the original enactment and, in any event, to represent the sound position in public policy.
632.32 Annotation
Sub. (6) deals with prohibited provisions. Par. (a) picks up the last sentence of former sub. (2) (b) which was a prohibited rather than a required provision. Par. (b) incorporates what was formerly s. 632.34 (3) in sub. (6) (b) 1., former subs. (5) and (6) in sub. (6) (b) 2., former sub. (2) (a) in sub. (6) (b) 3 and former sub. (2) (b) and (c) in sub. (6) (b) 4. Par. (c) continues the first sentence of former s. 632.34 (4), without change.
632.32 Annotation
It escaped the attention of everyone involved in the revision, and not least the principal drafters, that former s. 632.34 (1) narrowed the coverage of old s. 204.34. That has led, in this amendment, to combining most of ss. 632.32 and 632.34 in a single section, numbered 632.32. All parts of s. 632.34 which need to be preserved are transferred to s. 632.32, with the minor exception contained in new s. 632.34. [Bill 146-S]
632.32 Note
NOTE: 1995 Wisconsin Act 21, which became effective on July 15, 1995, made significant changes in the law regarding the "stacking" of insurance policy coverage.
632.32 Annotation
A "family exclusion clause" valid in the state of policy issuance will be given effect in Wisconsin. Knight v. Heritage Mutual Insurance Co.
71 Wis. 2d 821,
239 N.W.2d 348 (1976).
632.32 Annotation
The concept of permissive use is the same regardless of whether it arises under the "any motor vehicle" coverage section of s. 344.33 (2) or the omnibuses coverage statute. Gross v. Joecks,
72 Wis. 2d 583,
241 N.W.2d 727 (1976).
632.32 Annotation
A "fellow employee" exclusion clause is only valid if the tort-feasor and injured party are employees of the named insured and employer is required to provide worker's compensation coverage. Dahm v. Employers Mutual Liability Insurance Co.
74 Wis. 2d 123,
246 N.W.2d 131 (1976).
632.32 Annotation
A spouse who was not party to the contract, reasonably believing that coverage existed after the insured spouse's death, must be given a grace period before having to comply with technical, not commonly known provisions of a policy. Handal v. American Farmers Mutual Casualty Co.
79 Wis. 2d 67,
255 N.W.2d 903 (1977).
632.32 Annotation
Generally when a permissive user of a vehicle is the real owner of the car for all practical purposes, but not the named insured, and the permissive user grants permission for a 3rd person to use the vehicle, the named insured's permission is implied. American Family Mutual Insurance Co. v. Osusky,
90 Wis. 2d 142,
279 N.W.2d 719 (Ct. App. 1979).
632.32 Annotation
Injury to a police officer who was stabbed while unloading beer cans from an automobile did not arise out of use of the automobile. Tomlin v. State Farm Mutual Auto. Insurance Co.
95 Wis. 2d 215,
290 N.W.2d 285 (1980).
632.32 Annotation
Sub. (4) (a) 2. b. does not mandate coverage for an accident involving the insured's vehicle and an unidentified motor vehicle when there was no physical contact between the vehicles. Hayne v. Progressive Northern Insurance Co.
115 Wis. 2d 68,
339 N.W.2d 588 (1983).
632.32 Annotation
Third parties may recover against an insurer even though the insured's fraudulent application voided the policy under s. 631.11. Rauch v. American Family Insurance Co.
115 Wis. 2d 257,
340 N.W.2d 478 (1983).
632.32 Annotation
Arguments that "reduction clauses" in uninsured motorist provisions were invalid and that a release did not bar subsequent a claim against the insurer for bad faith were frivolous. Radlein v. Industrial Fire & Casualty Insurance Co.
117 Wis. 2d 605,
345 N.W.2d 874 (1984).
632.32 Annotation
A "drive other car" exclusion which prohibited stacking of uninsured motorist benefits against same insurer was voided by s. 631.43. Welch v. State Farm Mutual Automobile Insurance Co.
122 Wis. 2d 172,
361 N.W.2d 680 (1985).
632.32 Annotation
A motor vehicle operated by an insured driver was not "uninsured" under sub. (4). Hemerley v. American Family Mutual Insurance Co.
127 Wis. 2d 304,
379 N.W.2d 860 (Ct. App. 1985).
632.32 Annotation
A reducing clause in an uninsured motorist provision was voided by sub. (4) (a). Nicholson v. Home Insurance Cos.
137 Wis. 2d 581,
405 N.W.2d 327 (1987).
632.32 Annotation
Because uninsured motorist coverage is "personal and portable", the claimant was covered by a policy on a vehicle not involved in the accident. Parks v. Waffle,
138 Wis. 2d 70,
405 N.W.2d 690 (Ct. App. 1987).
632.32 Annotation
Loss of consortium is not a separate bodily injury under a policy's "each person" limitation. Landsinger v. American Family Mutual Insurance Co.
142 Wis. 2d 138,
417 N.W.2d 899 (Ct. App. 1987).
632.32 Annotation
An insurer could not avoid uninsured motorist coverage based on a policy provision excluding resident relatives who own their own car. Hulsey v. American Family Mutual Insurance Co.
142 Wis. 2d 639,
419 N.W.2d 288 (Ct. App. 1987).
632.32 Annotation
A reducing clause and "regular use" exclusionary clause violated sub. (4) (a). Niemann v. Badger Mutual Insurance Co.
143 Wis. 2d 73,
420 N.W.2d 378 (Ct. App. 1988).
632.32 Annotation
An auto insurer who pays under an uninsured motorist provision is not a tortfeasor or tortfeasor's insurer against whom an injured insured's medical insurer may assert a subrogation claim. Employers Health Insurance v. General Casualty Company of Wisconsin,
161 Wis. 2d 937,
469 N.W.2d 172 (1991).
632.32 Annotation
A policy may expand but not reduce uninsured motorist coverage. The policy not the statute determines coverage beyond the statutory requirements. Fletcher v. Aetna Casualty & Surety Co.
165 Wis. 2d 350,
477 N.W.2d 90 (Ct. App. 1991).
