May 10--Insurance experts and opponents of a new, bipartisan-backed auto insurance law that reduces minimum coverage standards to pre-2010 levels say there's little evidence the measure will achieve its primary objective: lowering insurance costs for Wisconsin drivers.
"It's very complex to try to look at a piece of legislation and try to correlate (that) with premium changes," said Steve Witmer, a spokesman for American Family Insurance, one of the largest auto insurers in Wisconsin.
The new law essentially erases the 2009 legislation Gov. Jim Doyle signed boosting minimum coverage standards for the first time since 1982.
The law doubled bodily injury liability coverage minimums to $50,000 per person and $100,000 for multiple people, and lifted minimum property damage by 50 percent to $15,000.
Arguing the rules caused a significant spike in insurance costs for low- and middle- income drivers who can afford only minimum coverage, Gov. Scott Walker signed a law April 12 that will return the minimums to pre-2010 levels Nov. 1.
"Repealing this anti-consumer mandate is good for middle class Wisconsinites and small businesses, and I am proud to sign its repeal and replacement," Walker said at the time.
But experts say it's unclear how much premiums have gone up under the current rules, if at all.
In turn, they say, it's also hard to know how much costs could fall.
"Some changes take a while to shake out and to really feel the impact of them," said Witmer, of American Family Insurance. "I'm not sure we've felt the full impact of those (2009) changes up to this point."
"There's no hard numbers," said Andrew Franken, president of Wisconsin Insurance Alliance, a trade association. "We heard, anecdotally, (costs went up) as much as 20 to 30 percent. (But) it's way too early to tell."
Robert Kraig, executive director of Citizen Action of Wisconsin, a left-leaning collective that opposed the repeal, disputed claims that insurance costs had risen substantially.
"We did a report that showed that rates had gone up very little -- in fact, much less than the historic average," Kraig said. "Wisconsin rates are still among the cheapest in the country.
"I don't think (drivers are) going to see any decrease in their premiums because there was clearly not an increase in the first place."
Even if premiums and rates go unchanged, Witmer argued the new law offers consumers more choice.
"Most people ultimately end up with choices that are responsible and work in their best interest," he said. "For some people who might be on the fringe of being able to afford auto insurance, having that option available to them is a good public policy measure."
Kraig suggested insurance companies and their allies are more concerned about profits than consumers.
"What changes is that the policies aren't as good," Kraig said. "More people are not going to be able to recover nearly as much on auto accidents. People are going to get less for their money. There's much more burden on the individual consumers to buy a good policy at a lower price. It really is caveat emptor, as they say: buyer beware."
On that point, the Wisconsin Insurance Alliance's Franken agreed.
"We encourage consumers to shop around, check with their agents and their companies to see what products are best for them," Franken said. "I think consumers will be able to see some impact immediately when the bill becomes effective."
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