State Budget Ripple Effect:<br>Paying More For Your Car Insurance ...

by MacIver Institute

Know how you can save money on your car insurance.

Move.

Far away, across the state line, away from Wisconsin's state budget process that allows legislators to insert policy provisions into the State Budget.

As of this month, Wisconsin motorists enter a new era in insuring their vehicles. The minimum required insurance for a vehicle was $25,000 for each person injured in an accident, a cap of $50,000 per accident, and $10,000 to cover property damage. The new minimum coverage is $50,000 for each person injured, $100,000 for each accident, and $15,000 for property damage.

The new minimums were passed as part of the State Budget even though the auto insurance coverage minimums really had nothing to do with the state's finances.

Now the budget provisions are going into effect and many Wisconsin motorists are about to see their auto insurance rates go up. As coverage goes up, so do rates. The Wisconsin Insurance Alliance says auto insurance costs will increase by at least 33%, which equates to a $96 to $309 per driver annually.

Anyone who has sat in their insurance agent's office can understand this. If you decide you need more coverage, your agent pulls out the chart and tells you how much more you will pay. The agent never says,

Unfortunately, State Representative Tom Nelson, the Democratic Assembly Majority Leader, believes that increasing the mandated coverage for insurance will have nothing to do with the coming increases in premiums. He blames the insurance companies' investments and the downturn of the economy.

Nelson should consult his legislative colleagues in Florida. (Over the phone. We can't afford to have Nelson travel there.)  Florida is going through a health insurance experiment called "Cover Florida." Under the plan, Florida allows the sale of certain insurance policies to the uninsured free of all state mandates. By eliminating the mandates, individual insurance costs can drop from $400 for an individual to as little as $89 per month.

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