Smart Auto Insurance Blog

According to the article “Mandatory Auto Insurance Hits Wisconsin” by Hilary Dickinson on beloitdailynews.com, as of Tuesday Wisconsin drivers face a $500 fine maximum if they are caught driving without auto insurance.  This is a big change for Wisconsin auto insurance policy holders.

Wisconsin is the 49th state to make auto insurance mandatory and some auto insurance agents question whether or not the new law will be effective.  The new law requires drivers to carry proof of insurance with them when they are driving and one policy card should be kept in the vehicle at all times.  If a driver is pulled over and has insurance, but cannot prove it with a policy card then they may face a ticket.

Some experts wonder if the fines are going to be enough of an incentive for them to purchase auto insurance.  With auto insurance rates for high risk drivers being relatively high, it may be cheaper for them to take the risk of not having insurance at all.  There hasn’t been a huge increase in Wisconsin drivers shopping for auto insurance.  People who would abide such law already have auto insurance because it’s the responsible thing to do since Wisconsin already mandates drivers to be responsible for an accident financially.

According to the article “Car Insurance Scofflaws Raise Health Mandate Doubt” by Kristen Wyatt from the Associated Press found on Google, thousands of people on the road do not carry auto insurance even though most states require it.  This raises the question of the effectiveness of a health insurance mandate working.  It is something Congress continues to consider.

There have been auto insurance mandates out there for about 40 years and the insurance industry says it has not necessarily made the roads safer nor has it lowered auto insurance rates.  The President and CEO of the Property Casualty Insurers Association of America believes that a driver’s personal financial situation is a better indicator of whether or not they will carry auto insurance.  High auto insurance rates may force a driver who is strapped for cash to go uninsured. 

States with higher poverty levels have a similar correlation with the amount of uninsured drivers are on the road.  People cut back on auto insurance when they can’t afford it and there is a real possibility that if they make health insurance a requirement the same thing will happen.  People cut costs where they can in times of trouble and although health insurance and auto insurance are both highly important coverages, people risk going without it to put food on the table and keep water in their home.

As of June 1, 2010, Wisconsin will become the 49th state in the US to require drivers to have auto insurance coverage.  The only state left to not have this requirement will be New Hampshire.  This is according to the article “Are you a Wisconsin driver? You’ll need auto insurance by June” by Paul Gores on JSOnline.com. 

It is surprising to many that there are still 2 states that do not require auto insurance since 48 states have required it for years.  Senator John Lehman (D-Racine) believes having auto insurance is viewed as a responsibility of being a good US citizen.  If you cannot manage affordable auto insurance, then you probably cannot afford to pay if you are in an accident, therefore should not be on the road to begin with. 

But the Insurance Information Institute in NY is questioning the effectiveness of having an auto insurance mandate anywhere.  A study by the Insurance Research Council estimates that in 2007, 15% of Wisconsin drivers were uninsured, and that is only slightly higher than the national average of 13.8%.  Even in the states where proof of insurance is required to register a car or get a license, it doesn’t mean the driver is keeping the insurance once they walk out the door.  They can very easily turn around and cancel their policy or just not pay their premiums to save money.  The only way they would get caught is if they were in an accident or got pulled over.  This is of course against the law in 48, soon to be 49 states.  Whether your state requires auto insurance or not, there is no question that it’s important to be covered for your financial safety and for the safety of other drivers on the road. Getting multiple auto insurance quotes is the best way to see what’s available.

According to the article “Car Insurance Mandate in Wisconsin Budget; No Driver’s Card for Illegals” on insurancejournal.com, Wisconsin auto insurance policy holders will have to buy liability insurance for their cars, but illegal immigrants will not be issued special cards to drive legally.  This is under the new proposed Wisconsin budget legislature.

This new requirement has been considered and proposed since the 70’s, but never put through because of the insurance industry.  Governor Jim Doyle has expressed his support for the new proposal.  It would take effect next year.  Anyone pulled over with no insurance card would be subject to a fine of $10.

Posing more of a debate was the driver’s card for illegal immigrants.  Immigrant rights groups and the police argue for the cards claiming they make the roads safer by ensuring everyone, even illegal immigrants, carry ID and are able to get auto insurance.  Doyle did not propose this and the Senate rejected it in the Wisconsin budget.