The Legislature is debating rolling back the automobile insurance minimums that were raised in 2009. State Rep. John Nygren, R-Marinette, has brought up this issue in order to allow people to choose coverage levels they can afford according to C3K’s report. Statistics show 96 percent of all bodily injury claims were $15,300 or under, a figure well below Wisconsin’s old $25,000 limit, and certainly below the new $50,000 limit. So long as the crash claim statistics are steady, there is no clear reason why rates would go up when the risk of additional payouts to the insurance company is minimal. An aid for State Rep. Mark Pocan, D-Madison, suggested to me that the financial impact of the bill was inconclusive at the time the minimums were raised in 2009.
The reason the minimums were raised is that in those rare instances where an innocent driver is the victim of an uninsured motorist and the expenses exceed the minimum , the financial consequences can become over burdensome. So on the surface there seems to be a tension between protecting people from a relatively slight risk of excessive bodily injury costs versus saving an inconclusive amount of money on their insurance. Why not provide both? Keep the 2009 minimums and help Wisconsin motorists save money by promoting Pay As You Drive (PAYD) car insurance to allow Wisconsin’s drivers to control their costs. As an added benefit, research has shown that PAYD can reduce crash rates and congestion. A good PAYD program can act as an incentive to reduce vehicle miles and provide the benefits thereof.
My insurer, State Farm, does not offer PAYD, though they do provide a rate reduction for drivers whose total annual travel is below 7,500 miles. Progressive Insurance provides a PAYD, as well as an even more promising program called Snapshot, which provides rate reductions for low mileage as well as safe driving habits.
Maybe it is time to contact John Nygren’s office and tell him to allow people to create affordable insurance rates for themselves by promoting their options for Pay As You Drive insurance?
can we add to the mileage deduction then for those who do heavy driving for business?
Jeff,
Are you asking if someone who does a lot of driving for business would be likely to be approved for a low-mileage discount?
If so, the answer is probably no. If they were a very safe driver, they could get a break for that via the snapshot program provided by Progressive.
Just a word of warning: I just tried clicking on some of the car insurance ads posted on the page from google adsense to get sense of whether they offered PAYD, and within SECONDS of walking through their quote forms (and filling out the phone number field), I got a call from two insurance companies looking to connect me to a sales representative.
I told them I was looking to see if they offered “Pay-As-You-Drive” insurance, and they didn’t seem to know that existed. Looks like there is quite a bit of room to promote PAYD in Wisconsin.
…and I recieved 4 e-mails from insurance companies within 10 minutes with rates ranging from $400-$800/yr. With such intense competition, I find it hard to believe that rolling back the insurance minimums is going to have much of an effect on prices. There are already tons of options out there for finding savings.