Wisconsin Car Insurance Rates to Skyrocket in 2010

Published: Thu 19 Nov 2009

Perry Begay - Staff Writer

Tough times are about to get even tougher for Wisconsin residents. Earlier this month, auto insurance companies began mailing out notices to Wisconsin policyholders to inform them that their premiums will likely increase in the near future. As insurers brace for the backlash, state politicians are desperate to shirk responsibility for the rate hikes.

The first changes to Wisconsin's insurance requirements that will raise premiums took effect on November 1st, and more will come in 2010 when all Wisconsin drivers will be required to carry liability insurance. The minimum mandatory levels of coverage will also increase.

Mr. Terry Scheller, a 47-year-old Nichols resident, recently got a notice telling him that the annual premium on his three-vehicle policy would increase by $231.

"I think it's awful," Scheller commented. "How much more can people afford? Times are tough. Guess who's paying for it? People like me with clean driving records."

The new insurance laws received the approval of the Democrat-controlled state Legislature earlier this year. However, Democrats are reluctant to accept any blame for the newly inflated auto insurance rates.

Assembly Majority Leader Tom Nelson, D-Kaukauna, wrote in an October 7 note to a constituent who asked about the higher premiums that "any premium increases are due to the business decisions of insurance providers rather than any action taken by the Legislature."

Mr. Scheller heard the same line from Mr. Nelson when he called the politician to complain about his new rates.

"I'm not buying it from Mr. Nelson," Scheller explained. "I believe it's the state law. That's what I'm hearing from two different agents."

The Legislature's top Democrat argued in an interview that auto insurers were "simply using the Legislature as an excuse to raise premiums and generate more profit."

The president of the Wisconsin Insurance Alliance, Mr. Andy J. Franken, disagrees, calling Nelson's claim "flat out wrong." The Insurance Alliance represents the interests of Wisconsin insurers and devoted over $500,000 of its budget to lobby against the insurance laws passed by the Legislature.

Franken claims that the Legislature basically increased the level of coverage Wisconsin drivers will have to carry, and it follows logically that premiums would then increase.

"Everyone understands if you buy more of something, it costs more money," Franken contends.

Although the insurance companies and state politicians agree that auto insurance rates will rise because of the changes, rates may not increase for all drivers. Similarly, the magnitude of the increase will depend on a number of factors.

The people who will be most impacted by the new regulations are those who purchased only the minimum required amount of liability protection. As always, the policyholder's driving record and claims history will also influence premiums.