Smart Auto Insurance Blog

The Wisconsin auto insurance bill mentioned in the previous blog has been passed according to the article on BadgerHerald.com by Andrew Averill.  The bill will lower coverage limits for auto insurance which were originally raised in an attempt to save consumers money, but the Democrats have other suggestions to repair the budget.

Currently the law requires auto insurance companies to cover $50,000 for accidents causing bodily injury, $100,000 for two or more persons and $15,000 for property damage.  The limits will be changed to $25,000, $50,000 and $10,000 respectively with the passing on this new bill in Wisconsin.  Assembly Speaker, Jeff Fitzgerald, believes the previous law raised auto insurance rates for families and limited choices to the consumer shopping around to compare auto insurance.

Fitzgerald also goes on to say that the new bill will help consumers decide for themselves what level of coverage is best for their family, and it should make auto insurance more affordable for lower to middle class income families.  He believes it’s the perfect blend of consumer choice and consumer responsibility.  Others argue that the new bill will take away some consumer protections, but now that’s it is going to be signed into law people are focusing on the positives and hoping for the best.

Today, I read a new article in the Wall Street Journal about the increase in uninsured motorists over the past few months. M.P McQueen reports that a recent survey by the Insurance Research Council found that several hundred thousand Americans have dropped their auto insurance over the past year, and that a 1% increase in the unemployment rate results in a 0.5% increase in the number of uninsured drivers.

Experts blame this issue on a perfect storm of higher unemployment and higher premiums hitting consumers at once. The U.S. Labor Department’s consumer price index indicates that auto insurance premiums have increased 3.8% over the past year. While I can’t blame drivers for trying to save money on auto insurance, dropping your insurance isn’t a good way to do it. Not only is driving with insurance illegal in 48 states and Washington, D.C.; but in the event of an accident, all of your assets could be wiped out in court. Also, you can be penalized with a 25-50% increase in premiums when you decide to buy auto insurance again.

A lot of people who have kept their auto insurance have downgraded to the bare minimum coverage, which may not be enough. If you get in an accident with an uninsured driver, uninsured motorist insurance will protect you and compensate your medical expenses. 20 states currently require this type of insurance by law; drivers in other states who don’t have this coverage would have to sue for compensation. Most uninsured drivers don’t have a lot of assets, so you’d be very unlikely to recoup any catastrophic medical expenses. Although uninsured and underinsured motorist coverage adds from 7% to 9% to your insurance premium, the increase in uninsured drivers on the road could make it valuable for drivers in every state.

Find out if your state auto insurance requirements include uninsured motorist coverage.