New Wisconsin Car Insurance Law Facing Growing Pains

In some states, drivers who do not continually pay their car insurance premiums face automatic cancellation of their policies. However, Wisconsin does not enforce the regulation this way, and the state is finding more and more people are  getting around paying for their car insurance.

Wisconsin’s New Law

Effective as of June 1, 2010, all drivers in the state of Wisconsin were required to have car insurance. No one may drive a car unless the insurance policy has a minimum liability limit of $50,000 for each person, $100,000 for each accident resulting in bodily injury and $15,000 for property damage.

If a driver is pulled over or is involved in a car accident, he is required to have proof of his insurance coverage with him at all times to show the law enforcement officers if necessary. If the policy has been recently renewed and the drive has not received a new insurance card, he is able to print out a document stating that the policy is still active. Those who cannot afford car insurance from major or local companies can still get coverage through the Wisconsin Auto Insurance Plan.

People are Committing Insurance Fraud

While Wisconsin has passed a new insurance law that requires every driver to have valid car insurance, most people are not following through with the process. In fact, without a regulation in place that forces policies to end if the payments are not made, drivers are realizing that they can get away with avoiding car insurance. Hypothetically speaking, a driver could buy a policy for six months or for one year, make only one payment and let the policy lapse, yet still prove that they are covered for the remaining months, even though the policy isn’t active anymore.

Police in Wisconsin are finding it increasingly difficult to tell whether a driver has valid car insurance or not. They cannot pull over a driver simply to check to see if he has insurance; instead, the driver must have committed a traffic or motor vehicle violation that requires proof of insurance. Police sometimes need to contact the insurance company on a case-by-case basis in order to prove if the policy is still in effect or if the policy has ended.

Penalties for Driving without Car Insurance

Although an investigation may be needed, if a driver is caught without insurance, he can expect to receive a fine of $10 if he can later provide proof of insurance. On the other hand, if no insurance is shown, the driver will receive a $500 fine. If a driver tries to fake having insurance or provides false proof of coverage, the state patrol will slap him with a fine of at least $5,000. The reason for such a high fine is simple: to entice drivers to pay their premiums as required by law. The rates that a driver would pay for car insurance would be significantly less than if he was to get caught faking insurance coverage.

The ultimate penalty for driving without insurance is finding yourself in court for injuring someone in a car accident and having no insurance company to defend you or pay damages.

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