Auto Mandates Hit the Dairyland
by admin on Sep.04, 2010, under Home insurance
Wisconsin drivers will soon feel the pinch of the states’ auto insurance mandate, with the 90 day grace period preceding the laws full enforcement expiring in early September . The mandatory auto insurance laws was first introduced in Wisconsin Gov. Jim Doyle’s 2009 budget, as part of a series of regulatory changes to Wisconsin’s auto insurance market. The new provisions now require motorists to obtain at least $100,000 in insurance coverage for injuries to one person and $300,000 in insurance to cover accidents in which two or more people are injured. Those are substantial increases from the prior levels of $25,000 per injured person and $50,000 per multiple-injury accident.
These mandates attempt to address the “free rider” problem: Some people who drive without insurance and get into accidents cannot afford to pay for the damages they’ve caused. In theory, mandating at least a minimum level of coverage could solve this problem. As a result, few people object to such mandates in principle. The debate has mostly revolved around the size of the mandates: Should the government mandate a minimum level of financial responsibility or require people to buy as much coverage as possible?
Supporters of Doyle’s provisions, including the Wisconsin State Bar Association, contend the new minimums will give additional security to those who get into automobile accidents. Groups opposing Doyle’s provisions, including the Wisconsin Insurance Alliance (WIA), argue the changes would force families to pay at least 33 percent more for auto insurance. The WIA argues that those who can’t afford the higher premiums are likely to forgo them and drive without insurance. According to WQOW-Eau Claire, Wisconsin State Police are expected to ramp up enforcement with the grace period ending.
I have written on this subject in the past, both in a FIRE Policy News article and a Heartland Institute Research & Commentary .
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