Wisconsin Law Misses the Point on Higher Car Insurance Liability Limits






Wisconsin recently enacted a new law that substantially lowers the minimum car insurance required by law. While this sounds like a win for consumers at first, the truth is the new law could end up far more expensive for drivers in the long run. Lower coverage requirements leave drivers without enough financial protection to cover the damages from even a relatively small collision. Consumers need to realize that when the insurance runs out, the rest of the money to pay for repairs and medical bills will come from their own pockets.

Previous Limits Already Too Low

Consumer advocates complain that the minimum requirements for car insurance in Wisconsin were already lower than they should be. Before the new law is enacted, customers were required to carry at least $50,000 in liability coverage. The new law cuts that number in half. That leaves $25,000 available through the insurance company to cover all of the costs of an accident. In many cases, the medical bills alone will exceed the former $50,000 limit, especially if more than one person was in the car at the time of the accident. A $25,000 limit will hardly make a dent in common accident costs.

Consumers Bear the Brunt of Lower Coverage Limits

Once the insurance money runs out, consumers are left to handle the remaining bills on their own. Since the consumers who choose the lowest legal car insurance limits usually have lower incomes, this could become a serious problem for Wisconsin drivers very quickly. Motorists could face lawsuits and seizure of their assets in order to cover their liability costs after an accident. The new law actually benefits insurance companies far more than it benefits drivers because it limits the amount that the insurance company is responsible for.

Law Change Intended to Help Consumers

Wisconsin lawmakers passed this law with the best of intentions. It was intended to help more people afford to purchase car insurance during these difficult economic times. If more people can afford the minimum legal car insurance requirements, there should be fewer uninsured motorists on the road, which should help everyone in the event of an accident. The trouble is that when drivers are allowed to carry coverage that does not begin to meet the needs of almost any collision, the insurance is not effective for either party involved in the accident. The new limits will hardly scratch the surface of the overall damages, and the person who had been trying to save money on insurance will eventually have to spend far more money than they would have if they had purchased a more effective policy.

Advocates Urging Consumers to Purchase More than the Legal Minimum

The good news is that consumers can choose to buy policies with higher limits than the legal minimum. It is in every driver’s best interest to purchase enough insurance so he or she will be covered after a serious accident. Buying a policy with a higher limit might cost more in the short term, but it will be a much easier investment over time if it will provide protection against the high costs of damage or injuries after a collision.


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