The Wisconsin State Assembly passed a bill Tuesday that would lower coverage limits for auto insurance that Republicans said would save the consumer money, while Assembly Democrats interrupted the debate to introduce an alternative budget repair.
The insurance bill would repeal the limit increase that passed through the Legislature under former Gov. Jim Doyle. The current law requires insurance companies to cover $50,000 for accidents causing bodily injury to or death of one person, $100,000 for two or more persons and $15,000 for property damage.
Under the new bill passed Tuesday, the limits for injury or death would be $25,000 and $50,000, respectively, while property damage coverage would be reduced to $10,000.
Assembly Speaker Jeff Fitzgerald, R-Horicon, said the law under Doyle raised auto insurance premiums for Wisconsin families and did not offer enough choices to consumers.
“Consumers should be able to decide for themselves what level of coverage is best for them and their families,” Fitzgerald said. “This [bill] will also make insurance more affordable for lower and middle income families. It’s really the perfect marriage of consumer choice and responsibility.”
One of the bill’s authors, Rep. John Nygren, R-Marinette, said the pre-Doyle insurance levels and the levels contained in the new bill, were at or below the levels of almost every state in the country and covered nearly 96 percent of claims.
Wisconsin Insurance Alliance spokesperson Andy Franken said the bill would provide more choice and affordability in the marketplace. Consumers would be able to pick the coverage that is appropriate for them and their families.
However, critics claim the bill actually takes away consumer protections.
“Probably the biggest consumer trap contained in the bill will allow insurance companies to insert language into their polices that will prevent consumers from ever receiving the coverage they thought they had purchased,” Wisconsin Association for Justice President Mike End said in a statement.
The provision allowed by the bill, called a reducing clause, would let the injured party’s insurance company to reduce coverage based on the amount of the guilty party’s liability insurance coverage, End said.
The Senate approved the bill Feb. 8, and the Assembly approved a separate, identical bill in a 61-34 vote Tuesday. The Assembly’s bill must be sent to the Senate before reaching Gov. Scott Walker, although the Democrats delayed the Republicans from messaging the bill to the Senate through a procedural move.
The Assembly must wait until the next floor session to move the bill to the Senate. Walker is expected to sign the bill whenever it passes through the Legislature, his spokesperson Cullen Werwie said.
Also during the Assembly debate, Democrats introduced an alternative to the governor’s controversial budget repair bill.
“This alternative that we’ve just handed in has taken out the policy [in the budget repair bill] and deals with the fiscal realities of the state,” Rep. Tamara Grigsby, D-Milwaukee, said. “The bill itself addresses several issues not addressed in the budget repair bill and leaves the state with a net balance.”
The alternative bill addresses three shortfalls in the current 2010-2011 fiscal year budget, including the medical assistance, public defender, private bar and Department of Corrections shortfalls by requiring the same benefit contributions and debt restructuring contained in Walker’s original bill.
The Associated Press and news reporter Sarah Jarvis contributed to this article.
