Auto insurance law takes effect today [The Leader-Telegram, Eau Claire, Wis.]

Jun. 1--State residents may want to take inventory of their purses and wallets as a new state law goes into effect today regarding auto insurance.

Drivers in Wisconsin are now required to show proof that they have coverage. Law enforcement will be routinely asking for proof of insurance in addition to a driver's license during traffic stops. Such cards often are provided by insurers.

The proof-of-insurance regulation follows minimum coverage increases that went into effect Nov. 1 and Jan. 1.

The proof-of-insurance law falls under secondary enforcement, which means officers may not stop or inspect a vehicle solely to determine compliance with the insurance requirement, said Jason Kaveney, community relations officer with the Eau Claire Police Department.

"It is hard to determine if we will see a lot of these violations," Kaveney said. "Since it is a new statute, we have no prior years to compare it to.

"Historically the Eau Claire Police Department has issued around 15,000 traffic warnings and 7,500 traffic citations yearly, so (such) drivers can anticipate they will be asked to provide proof of insurance during traffic stops in the future."

State Patrol officers will be asking for insurance credentials on every stop, said State Patrol Maj. Dan Lonsdorf, director of transportation safety for the state Department of Commerce. Those without insurance will be fined $200.50.

The law allows for fines of up to $500. Those who have insurance but don't have proof are subject to a $10 fine.

Police in Eau Claire, Chippewa Falls and Menomonie will be enforcing the new law immediately.

"All drivers will receive a written warning the first month if they are not in compliance with the new statute and will be required to comply within 10 days after the traffic stop or receive a citation," Menomonie Police Lt. Todd Swartz said.

Proponents of the changes argue that motorists should be covered for damage they could cause to other drivers or property.

However, opponents say they new regulations aren't needed because about 85 percent of drivers in Wisconsin voluntarily buy liability coverage, which is more than in many states where auto insurance already was a requirement. The increases in minimum coverage, it is argued, also could make insurance more expensive, increasing the likelihood that those who can't afford the coverage or a fine could lose their driver's licenses.

The policy changes led to a flood of phone calls for Deborah Becker, a State Farm Insurance agent in Eau Claire.

"The inquiries in the past few days have been unusual in that the percentage of calls received from uninsured individuals, normally about 15 percent of our caseload, has increased exponentially to about 90 percent of calls processed," she said.

Average auto insurance expenditures in Wisconsin for 2007 were $582, according to the National Association of Insurance Commissioners, which ranked 45th in the U.S. The District of Columbia had the highest average at $1,140. Rates are determined by dividing total premiums collected by the number of insured vehicles in the state.

Wisconsin also is far from alone in mandating coverage as the state of New Hampshire is the lone holdout. About half the states also require proof of insurance to obtain or renew vehicle registrations, which will not be the case in Wisconsin. To what extent the changes will affect the insurance industry remains unknown.

"I guess time will tell if claims activity increases due to the fact that you have forced a group of people that in the past went without insurance to now have insurance," said John Killey, president of John Killey Insurance Agency in Eau Claire. "A positive impact would be that the person that has always carried insurance will have a better chance of recovering some bodily injury or property damage from a previously uninsured vehicle or person.

"As with anything that is required, there will always be people that don't really care to follow the new laws and will stay uninsured -- and hope that they don't get into a situation where they are caught and fined."

Marlaire can be reached at 715-833-9215, 800-236-7077 or [email protected].

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Copyright (c) 2010, The Leader-Telegram, Eau Claire, Wis.

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