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 former sub. (5), 2017 stats., 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 two 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
Under the facts of the case, a policy “re-issued” in October 2013, and cancelled in December 2013, constituted a renewed policy that under sub. (2) the insurer was prohibited from cancelling in midterm absent specifically identified reasons. When the plaintiff and the insurer had engaged in a long series of policy cancellations and reinstatements, all the reissued policies contained the same policy number and a new declaration sheet listing forms and endorsements already in the plaintiff's possession, and the final policy stated, in bold capital letters, “POLICY RE-ISSUED,” the insurer's conduct would have led a reasonable insured to believe that the October 2013 policy was a renewed policy stemming back to the initial policy issued in 2010. LIR Investments LLC v. Stokelbusch, 2017 WI App 63
, 378 Wis. 2d 91
, 902 N.W.2d 801
Special cancellation provisions.
The following cancellation provisions apply to the policies specified, whether or not s. 631.36
is also applicable to them.
Cancellation upon request of premium finance company.
Section 138.12 (12)
applies to cancellation on request of a premium finance company.
Cancellation upon request of creditor.
applies to cancellation upon request of a creditor.
Health care liability insurance.
Section 655.24 (2) (b)
applies to the termination of a health care liability insurance policy.
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.
applies to motor vehicle liability policies certified under s. 344.31
Health care liability policy.
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.
Renewals in affiliates. 631.39(1)(1)
This section applies to property and casualty lines of insurance, excluding disability insurance, as defined in s. 645.675 (1) (h)
An insurer may renew a policy in an affiliate without having to comply with s. 102.31 (2) (a)
or 631.36 (4)
or s. INS 21.01 (6), Wis. Adm. Code, if all of the following are satisfied:
All of the stock of, interest in, or control of the affiliate is held by one or more persons in the same insurance holding company system, as defined in s. 622.03 (2)
, that includes the insurer.
The affiliate holds a valid certificate of authority in this state for the kind of business necessary to write the policy being renewed.
If the policy renewed in the affiliate contains terms and conditions, except for the rates and rating plan, that are less advantageous to the policyholder than the policyholder's current policy, the insurer complies with the requirements of s. 631.36 (5)
The insurer provides notice to the policyholder at least 60 days before the renewal date that the policy will be renewed in an affiliate.
The notice under par. (d)
includes or states all of the following information:
The name and contact information of the company in which the policy will be renewed and that it is affiliated with the insurer.
That the premium for the renewal policy will be determined according to the rates and rating plan of the affiliate.
If the policy currently held by the policyholder is written by a mutual company and will be renewed in an affiliate that is a stock insurance company, that the policy will be renewed in an affiliate that is a stock insurance company and the policyholder will no longer have the rights that are granted to a mutual policyholder.
The A.M. Best or similar rating of the affiliate, if that rating is lower than the current A.M. Best or similar rating of the insurer.
If the amount of the premium for the policy after it is renewed in the affiliate will increase 25 percent or more from the amount of the premium prior to being renewed in the affiliate, notice of the increased premium.
If the policy is a worker's compensation insurance policy under ch. 102
, the insurer provides notice to the department of workforce development at least 60 days prior to renewal of the policy in an affiliate notifying the department of the name of the affiliate in which the policy is to be renewed.
Applicability of other law.
do not apply to renewals under this section.
History: 2017 a. 241
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)(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.
Fraud as a defense.
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 this section. 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 this section 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 Co., 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.
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
Under the facts of the case, the insurer's tender of the policy limits into court did not relieve the insurer of its duty to defend the insured in the lawsuit. Gross v. Lloyds of London Insurance Co., 121 Wis. 2d 78
, 358 N.W.2d 266
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).
An insurer may insert in any insurance policy a provision that no change in the policy is valid unless approved by an executive officer of the insurer, or unless the approval is endorsed on the policy or attached to it, or both, and that no agent has authority to change the policy or waive any of its provisions. This does not preclude a person claiming a right under the policy from relying on waiver or estoppel in an appropriate case.
History: 1975 c. 375
Dividends on policies. 631.51(1)(1)
Life insurance and annuities.
applies to life insurance and annuities.
Insurance, other than life insurance and annuities.
Any insurer may distribute a portion of surplus attributable to policies other than life insurance or annuities, in amounts and with classifications the board of directors determines to be fair and reasonable. Such distribution may not be made contingent on the continuation of the policy or of premium payments except under s. 632.75 (2)
. A schedule explaining the basis for the distribution shall be filed with the commissioner prior to the distribution.
When not specified in policy.
Any insurer may distribute surplus to any class of policyholders even if those policies do not so provide. A schedule explaining the basis for the distribution shall be filed with the commissioner at least 30 days prior to the distribution.
It is permissible to provide an indivisible dividend to classes of policyholders having more than one type of policy, including a combination of life or annuities with other types of insurance.
History: 1975 c. 375
Group and blanket insurance. 631.61(1)(a)(a)
Except under par. (d)
, an insurer issuing a group insurance policy other than blanket shall, as soon as practicable after the coverage is effective, provide a certificate for each member of the insured group, except that only one certificate need be provided for the members of a family unit. The certificate shall contain a summary of the essential features of the insurance coverage, including any rights of conversion to an individual policy. Upon receiving a written request therefor, the insurer shall also inform any insured how the insured may inspect a copy of the policy during normal business hours at a place reasonably convenient to the insured.
The commissioner may by rule impose a similar requirement for any class of blanket insurance policies for which the commissioner finds that the group of persons covered is constant enough for such action to be practicable and not unreasonably expensive.
Method of providing certificates.
The certificate shall be provided in a manner reasonably calculated to bring it to the attention of the certificate holder. The insurer may deliver or mail it directly to the certificate holder or may deliver or mail the certificates in bulk to the policyholder to transmit to certificate holders, unless the insurer has reason to believe that the policyholder will not promptly transmit the certificates. An affidavit by the insurer that it has mailed the certificates in the usual course of business creates a rebuttable presumption that it has done so. As an alternative to delivering or mailing the certificate, the insurer may make the certificate available electronically through an online internet or policyholder network website. If the insurer makes the certificate available electronically, the insurer shall do all of the following:
Request the policyholder to post the information, as well as instructions on how to access the certificate, in the policyholder's place of business or to publish the information and access instructions in a house organ that is reasonably calculated to bring the information to the attention of the certificate holders.
Provide notice to the policyholder of any subsequent change in the certificate and request the policyholder to notify the certificate holders of the change in the manner specified in subd. 1.
Provide a paper copy of the certificate to any certificate holder upon request.
The commissioner may by rule or order prescribe substitutes for delivery or mailing of certificates, including booklets describing the coverage, the posting of notices in the place of business, or publication in a house organ, if the substitutes are reasonably calculated to inform certificate holders of their rights.
Effect of failure to issue certificates.
Unless a certificate or an authorized substitute has been made available to the certificate holder as required by this section, no act or omission by the certificate holder after the coverage has become effective as to the certificate holder, other than intentionally causing the loss insured against, affects the insurer's obligations under the insurance contract.
Every insurance policy or annuity contract shall conspicuously display the name of the insurer on its first page.
History: 1975 c. 375