Right to return policy.
The right to return a disability insurance policy under s. 632.73
, except that this clause may be conspicuously attached to the first page rather than printed on it.
(2) Manner of display.
Clauses listed in sub. (1)
shall be displayed conspicuously and separately from any other clauses.
History: 1975 c. 375
; 1981 c. 218
Termination of insurance contracts by insurers. 631.36(1)(a)(a)
Except as otherwise provided in this section or in other statutes or by rule under par. (c)
, this section applies to all contracts of insurance based on forms that are subject to filing under s. 601.58
Contracts more favorable to policyholder.
The contract may provide terms more favorable to policyholders than are required by this section.
Exemption by rule.
The commissioner may by rule totally or partially exempt from this section classes or parts of classes of insurance contracts if the policyholders do not need protection against arbitrary or unannounced termination.
The rights provided by this section are in addition to and do not prejudice any other rights the policyholder may have at common law or under other statutes.
Rescission or reformation.
This section does not apply to the rescission or reformation of any insurance contract.
Except as provided by par. (c)
and sub. (3)
and s. 655.24 (2) (b)
, no insurance policy may be canceled by the insurer prior to the expiration of the agreed term except for failure to pay a premium when due or on grounds stated in the policy, which must be comprehended within one of the following classes:
Substantial change in the risk assumed, except to the extent that the insurer should reasonably have foreseen the change or contemplated the risk in writing the contract;
Substantial breaches of contractual duties, conditions or warranties; or
Attainment of the age specified as the terminal age for coverage, in which case the insurer may cancel by notice under par. (b)
accompanied by a tender of a proportional return of premium.
No cancellation under par. (a)
is effective until at least 10 days after the 1st class mailing or delivery of a written notice to the policyholder.
New policies. Paragraphs (a)
do not apply to any insurance policy that has not been previously renewed if the policy has been in effect less than 60 days at the time the notice of cancellation is mailed or delivered. No cancellation under this paragraph is effective until at least 10 days after the 1st class mailing or delivery of a written notice to the policyholder. Subsections (6)
do not apply to such a policy.
(3) Anniversary cancellation or alteration.
A policy may be issued for a term longer than one year or for an indefinite term with a clause providing for cancellation by the insurer in the manner provided in sub. (4) (a)
for nonrenewals, except the notice must be given at least 60 days prior to any anniversary date and an insurer may not cancel a policy solely because of the termination of an insurance marketing intermediary's contract with the insurer unless the insurer complies with sub. (4m)
. The clause may also provide for alteration of the terms or premium by the insurer as provided in sub. (5) (c)
, except the clause must then permit cancellation by the policyholders as provided in sub. (5) (c)
Subject to subs. (2)
, a policyholder has a right to have the policy renewed, on the terms then being applied by the insurer to similar risks, for an additional period of time equivalent to the expiring term if the agreed term is one year or less, or for one year if the agreed term is longer than one year, unless at least 60 days prior to the date of expiration provided in the policy a notice of intention not to renew the policy beyond the agreed expiration date is mailed or delivered to the policyholder, or with respect to failure timely to pay a renewal premium a notice is given, not more than 75 days nor less than 10 days prior to the due date of the premium, which states clearly the effect of nonpayment of premium by the due date.
Notwithstanding par. (a)
an insurer may not refuse to renew a policy solely because of the termination of an insurance marketing intermediary's contract with the insurer unless the insurer complies with sub. (4m)
This subsection does not apply if the policyholder has insured elsewhere, has accepted replacement coverage or has requested or agreed to nonrenewal, or if the policy is expressly designated as nonrenewable.
(4m) Policy cancellation.
An insurer may refuse to renew or may cancel a policy under sub. (3)
solely because of the termination of an insurance marketing intermediary's contract with the insurer only if the notice of nonrenewal or cancellation contains an offer to continue or renew the policy with the insurer if the insurer receives a written request from the policyholder prior to the cancellation or renewal date. The insurer shall continue or renew the policy if a timely request is received unless the policyholder does not meet normal underwriting criteria.
Subject to pars. (b)
, if the insurer offers or purports to renew the policy but on less favorable terms or at higher premiums, the new terms or premiums take effect on the renewal date if the insurer sent by 1st class mail or delivered to the policyholder notice of the new terms or premiums at least 60 days prior to the renewal date. If the insurer notifies the policyholder within 60 days prior to the renewal date, the new terms or premiums do not take effect until 60 days after the notice is mailed or delivered, in which case the policyholder may elect to cancel the renewal policy at any time during the 60-day period. The notice shall include a statement of the policyholder's right to cancel. If the policyholder elects to cancel the renewal policy during the 60-day period, return premiums or additional premium charges shall be calculated proportionately on the basis of the old premiums. If the insurer does not notify the policyholder of the new premiums or terms as required by this subsection prior to the renewal date, the insurer shall continue the policy for an additional period of time equivalent to the expiring term and at the same premiums and terms of the expiring policy, except as permitted under sub. (2)
Exception. Paragraph (a)
does not apply if the only change that is adverse to the policyholder is a premium increase and if either of the following applies to the premium increase:
The premium increase is less than 25% and is generally applicable to the class of business to which the policy belongs.
The premium increase results from a change based on action by the insured that alters the nature or extent of the risk insured against, including but not limited to a change in the classification or the units of exposure or increased policy coverage.
Subject to par. (d)
, an insurer may alter the terms or premium of a policy issued for a term longer than one year or for an indefinite term on the anniversary date only if notice of less favorable terms or premiums is sent by 1st class mail or delivered to the policyholder at least 60 days prior to the anniversary date. If the insurer notifies the policyholder within 60 days prior to the anniversary date, the new terms or premiums do not take effect until 60 days after the notice is mailed or delivered, in which case the policyholder may elect to cancel the policy at any time during the 60-day period. The notice shall include a statement of the policyholder's right to cancel. If the policyholder elects to cancel the policy during the 60-day period, return premiums or additional premium charges shall be calculated proportionately on the basis of the old premiums. If the insurer does not notify the policyholder of the new premiums or terms as required by this subsection prior to the anniversary date, the insurer shall continue the policy until the next anniversary date or the renewal date, whichever is earlier, at the same premiums and terms as for the previous period, except as permitted under sub. (2)
An insurer may give notice under par. (a)
of a new premium by stating the actual amount or percentage increase to be charged. If the insurer cannot reasonably determine the actual amount or percentage increase 60 days prior to the renewal or anniversary date, the notice shall include a good faith estimate of the increase based on information that the insurer can reasonably obtain. If an estimate is stated, the insurer shall renew or continue the policy at a premium that does not exceed the increase stated in the notice except as permitted under sub. (5) (b)
(6) Information about grounds.
A notice of cancellation or nonrenewal under sub. (2) (b)
shall state with reasonable precision the facts on which the insurer's decision is based. No such notice is effective unless it so states the facts.
(7) Cancellation or nonrenewal notice. 631.36(7)(a)(a)
Except as provided in par. (b)
, notice of cancellation or nonrenewal required under sub. (2) (b)
is not effective unless the notice contains adequate instructions to the policyholder for applying for insurance through a risk-sharing plan under ch. 619
, if a risk-sharing plan exists under ch. 619
for the kind of coverage being canceled or nonrenewed.
(b) Paragraph (a)
does not apply to a notice of cancellation or nonrenewal issued by the mandatory health care liability risk-sharing plan established under s. 619.04
(8) Cancellation for nonpayment of premium. Subsections (6)
do not apply if the ground for cancellation or nonrenewal is nonpayment of the premium and if the notice so states.
There is no liability on the part of and no cause of action of any nature arises against any insurer, its authorized representatives, its agents, its employees, or any firm, person or corporation furnishing to the insurer information relating to the reasons for cancellation or nonrenewal, for any statement made by them in complying or enabling the insurer to comply with this section, or for the provision of information pertaining thereto.
See also s. Ins 6.77
, Wis. adm. code.
A policy did not lapse as the result of the insured's failure to pay a renewal premium before the policy's expiration date when the insurer failed to notify the insured of the nonrenewal or of the premium due. Sausen v. American Family Mutual Insurance Co. 121 Wis. 2d 653
, 360 N.W.2d 565
(Ct. App. 1984).
This section governs cancellation and recision of insurance contracts. WHEDA v. Verex Assurance, Inc. 166 Wis. 2d 636
, 480 N.W.2d 490
The state was the policyholder of its employee group health policy and it, not the insureds, was entitled to notice of policy changes under sub. (5). Schaefer v. Physicians Plus Insurance Corp. 174 Wis. 2d 488
, 497 N.W.2d 776
(Ct. App. 1993).
Sub. (5) requires notice of policy changes effected by the insurer, not changes effected by the legislature or the courts. Roehl v. American Family Mutual Insurance Co. 222 Wis. 2d 136
, 585 N.W.2d 893
(Ct. App. 1998), 98-1207
Under sub. (5), if an insurer offers to renew a policy on less favorable terms within 60 days of the renewal date, the insurer must inform the insured that the terms do not become effective until 60 days after the renewal is sent and that the insured has the same 60 days to cancel. Failure to comply requires the insurer to continue the prior policy terms for an additional period equal to the term of the expiring policy. Hanson v. Prudential Property & Casualty Insurance Co. 224 Wis. 2d 356
, 591 N.W.2d 619
(Ct. App. 1999), 98-0692
Sub. (5) does not apply to reducing clause changes that are not initiated by the insurer but come into effect by statutory change, even when the insurer gratuitously sends a renewal notice discussing the altered terms. Sukala v. Heritage Mutual Insurance Co. 2000 WI App 266
, 240 Wis. 2d 65
, 622 N.W.2d 457
An insurer may effectively eliminate the policyholder's right to renewal if it provides valid notice of nonrenewal. If notice is not provided, the policyholder retains this right, and barring any application of an exception under sub. (4) (b), it may exercise its right to a renewal. Magyar v. Wisconsin Health Care Liability Insurance Plan, 2001 WI 41
, 242 Wis. 2d 491
, 625 N.W.2d 291
Sub. (2) (c) contemplates 2 separate and distinct forms of notifying an insured of cancellation: postal mailing or personal delivery other than mailing. When the insurer informed the insured of its cancellation by mail, the trial court correctly measured the effective date of cancellation from the date of mailing. Schmitz v. Fire Insurance Exchange, 2005 WI App 76
, 280 Wis. 2d 560
, 696 N.W.2d 238
Special cancellation provisions.
The following cancellation provisions apply to the policies specified, whether or not s. 631.36
is also applicable to them.
(1) Cancellation upon request of premium finance company. Section 138.12 (12)
applies to cancellation on request of a premium finance company.
(2) Cancellation upon request of creditor. Section 424.303
applies to cancellation upon request of a creditor.
(3m) Health care liability insurance. Section 655.24 (2) (b)
applies to the termination of a health care liability insurance policy.
(4) Special limitations on cancellation. 631.37(4)(c)
Driver education motor vehicles. Section 341.267 (6)
applies to motor vehicles used for driver education.
Insurance of juveniles. Section 343.15 (4) (a)
applies to motor vehicle policies covering juveniles as described therein.
Motor vehicle liability policy. Section 344.34
applies to motor vehicle liability policies certified under s. 344.31
Health care liability policy. Section 655.25
applies to insurance issued by the mandatory health care liability risk-sharing plan established under s. 619.04
Warranty reimbursement insurance policy. Section 632.185 (2) (e)
applies to warranty reimbursement insurance policies.
Policies jointly issued.
Two or more insurers may together issue a policy in which their liability is either several or joint and several. If it is several, the heading of the policy shall conspicuously so state and the policy shall conspicuously state the proportion or amount of premium to be paid to each insurer and the type and the proportion or amount of liability each insurer agrees to assume.
History: 1975 c. 375
Other insurance provisions. 631.43(1)
When 2 or more policies promise to indemnify an insured against the same loss, no "other insurance" provisions of the policy may reduce the aggregate protection of the insured below the lesser of the actual insured loss suffered by the insured or the total indemnification promised by the policies if there were no "other insurance" provisions. The policies may by their terms define the extent to which each is primary and each excess, but if the policies contain inconsistent terms on that point, the insurers shall be jointly and severally liable to the insured on any coverage where the terms are inconsistent, each to the full amount of coverage it provided. Settlement among the insurers shall not alter any rights of the insured.
(2) Fraud as a defense. Subsection (1)
does not affect the right of an insurer to defend against a claim under the policy on the ground of fraudulent misrepresentation.
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.
A clause providing that any amount payable under the insurer's policy would be reduced by monies paid by other insurance company's uninsured motorist coverage was not valid; therefore, the plaintiff was entitled to the entire benefits under both uninsured motorist provisions. Landvatter v. Globe Security Insurance Co. 100 Wis. 2d 21
, 300 N.W.2d 875
(Ct. App. 1980).
An insurance policy provision that prohibits the stacking of uninsured motorist benefits against the same insurer is prohibited by sub. (1). Tahtinen v. MSI Insurance Co. 122 Wis. 2d 158
, 361 N.W.2d 673
Sub. (1) only prohibits the use of reducing clauses in indemnity coverages, not in underinsured motorist coverage. Kuehn v. Safeco Insurance Co. of America, 140 Wis. 2d 620
, 412 N.W.2d 126
(Ct. App. 1987).
If a single insurance contract incorporates coverage for two vehicles, charging two separate premiums, two policies have been issued under s. 631.43. Krause v. Mass. Bay Insurance Co. 161 Wis. 2d 711
, 468 N.W.2d 755
(Ct. App. 1991).
A fleet policy listing individual vehicles and assessing separate premiums for each is a separate policy for each vehicle and a single limit provision contained in the policy violates sub. (1). Carrington v. St. Paul Fire & Marine Insurance 169 Wis. 2d 211
, 485 N.W.2d 267
is extended to underinsured motorist coverage. An insured who pays separate premiums for each vehicle under a single policy can stack underinsured motorist coverage even though the policy contains a limit of liability clause. West Bend Mutual Insurance Co. v. Playman, 171 Wis. 2d 37
, 489 N.W.2d 915
Although a policy's limit of liability language has been held invalid under s. 631.43 for the purpose of preventing stacking, it is still valid for determining each policy's limit of liability. Schaefer v. General Cas. Co. 175 Wis. 2d 80
, 498 N.W.2d 859
(Ct. App. 1993).
The lack of underinsured motorist coverage on an accident vehicle was irrelevant when the insured had the coverage on two other vehicles. Under sub. (1), a policy definition amounting to a "drive-other-car" exclusion is invalid. Rodey v. Stoner, 180 Wis. 2d 309
, 509 N.W.2d 316
(Ct. App. 1993), Patraw v. American Family Mut. Ins. Co. 185 Wis. 2d 757
, 519 N.W.2d 643
(Ct. App. 1994).
Liability coverages insuring against the risk of loss arising out of specified, owned vehicles do not insure against the same loss and thus sub. (1) does not apply to those coverages. Weimer v. Country Mutual Insurance Co. 211 Wis. 2d 848
, 565 N.W.2d 595
(Ct. App. 1997), 96-1440
The applicability of sub. (1) cannot be ascertained by resorting to historical definitions of indemnity and liability insurance. An analysis must be made of whether a particular policy promises to indemnify the insured against the same loss as another policy. Taylor v. Greatway Insurance Co. 2000 WI App 64
, 233 Wis. 2d 703
, 608 N.W.2d 722
Sub. (1) did not invalidate a provision excluding coverage for a vehicle not owned by the driver but made regularly available to him when the owner's policy insured against losses arising from the use of the vehicle. The policies did not insure against the "same loss" within the meaning of sub. (1). Martin v. American Family Mutual Insurance Co. 2002 WI 40
, 252 Wis. 2d 103
, 643 N.W.2d 452
Section 632.05 (2), the valued policy law, does not provide that an insured is entitled to the limits of all policies insuring a dwelling. Instead, sub. (1), the pro rata statute, specifically governs situations when two or more policies indemnify against the same loss. Absent the consent of the insurers, insureds are entitled to the full amount of their loss but not to the full amount of both policies if the combined limits exceed the actual loss. Wegner v. West Bend Mutual Insurance Company, 2007 WI App 18
, 298 Wis. 2d 420
, 728 N.W.2d 30
Sub. (1) refers specifically to "other insurance" provisions. The accepted meaning of "other insurance" provisions does not include application to successive insurance policies. "Other insurance" refers only to two or more policies insuring the same risk, and the same interest, for the benefit of the same person, during the same period. The issue here was not which of two or more policies pays first, because they were not concurrent policies between competing insurers that applied to the same time period, but successive policies from the same insurer. Plastics Engineering Co. v. Liberty Mutual Insurance Co. 2009 WI 13
, 315 Wis. 2d 556
, 759 N.W.2d 613
Stacking uninsured motorist coverage. Hannula, WBB Oct. 1985.
Limitations on loss to be borne by insurer. 631.45(1)(1)
An insurance policy indemnifying an insured against loss may by clear language limit the part of the loss to be borne by the insurer to a specified or determinable maximum amount, to loss in excess of a specified or determinable amount, to a specified percentage of the loss, which may vary with the amount of the loss, or by a combination of these methods. If the policy covers various risks, different limitations may be provided separately for each risk if the policy clearly so states.
(2) Property coinsurance.
A policy indemnifying an insured against loss of or damage to property may limit the part of the loss to be borne by the insurer to a percentage of the total loss that corresponds to the ratio of the insured sum to a specified percentage of the value of the insured property.
History: 1975 c. 375
Public policy does not prohibit insurance coverage for statutorily imposed multiple damages. Cieslewicz v. Mutual Service Casualty Insurance Co. 84 Wis. 2d 91
, 267 N.W.2d 595