Thursday, June 4, 2009

Breakfast with Sen. Liebham -part 2 To coerce people out of their cars.

Update #2: 6/24/09 - The joint and several liability provision has been dropped by both the Senate and the assembly, but the budget still contains a proposal to allow stacking of insurance policies and to require increased coverage minimums. The senate has added a proposal requiring drivers in WI to purchase auto liability insurance.
Update: The proposed liability for being held 100% financially liable for all damages in an accident has been reset to 20 % instead of 1%. I still find this to be entirely unacceptable. The results will be the same.

Two of the non-fiscal items in Gov. Doyle's budget should be of concern to every WI citizen who drives a vehicle.

The first one is the raising of mandatory levels of insurance coverage. The state cannot raise your auto insurance premiums, but they can (and have) determine what a reasonable level of insurance coverage is to allow an individual to legally drive on our roads. The proposed change would raise your insurance (if you currently have the minimum coverage) by about 40%. Picture that, 40%, that's going to be about $300 for most people.

First of all, I would like to remind Mr. Doyle that not everybody in WI lives in a metropolitan area where there is public transportation available. This will relegate those folks on fixed incomes in places like Presque Isle or Siren or any number of rural communities to walking or riding bicycles, if they want to be continue to be law abiding citizens. This is Wisconsin. Walking and bicycles are not options for the entire year here. (Especially in Presque Isle or Siren-or really, any place in WI) One hopes those folks have enough land to support a good horse.(No buggies though, because they would require insurance.)
One assumes this will lead to a call for the good taxpayers of our lovely state to provide affordable public transportation for those in rural communities through yet more taxes.

One assumes this will also lead to an increase in the number of people driving without insurance which will cause another hike in that insurance cost.

Unfortunately that 40% increase in your insurance premiums is only the tip of the iceberg. The second item I want to cover in this post has the potential to more than double that or worse.

This second proposal is to drop the percentage of responsibility required to impose financial liability. This is wrong. Ethically wrong, morally wrong and financially wrong. It's a bit tricky, but let me see if I can explain the ramifications in plain language. Currently, in order for a WI citizen to be considered financially liable for the damages of an accident, it must be determined that they have at least 51% responsibility for that accident. That means if you are determined, under WI law, to be more than 50% responsible for the accident, you can be held financially liable for 100% of the damages caused by that accident.

Mr. Doyle's budget proposes that this percentage be dropped to 1.

Here's a scenario under the new budget if it is approved.

Your car is sitting in your driveway. (You managed to pay the new premium-what choice did you have, your work is 20 miles from your place of residence.) A single mother and an hourly wage earner are driving to their respective jobs. Neither one has insurance but they couldn't sell their vehicles - the market is gone because so few people could afford the insurance increase. Besides, they need a vehicle to get to work too, so what choice do they have but to drive illegally? They are both late and speeding. They collide in front of your house. One of the vehicles does a few flips, takes out a mailbox and the light post in front of your house and comes to rest next to your vehicle. A piece of this vehicle flies off and scratches your vehicle, which was sitting in your driveway. The single mother has two broken arms and a back injury. The other driver has a head injury which will put him into a coma for the next two months. The scratch to your vehicle would cost less than your deductible to fix, but here's the rub. Because you are the only one with insurance, you are now de facto 100% financially responsible for all the damages caused by this accident. You have 1% liability for the accident just because your vehicle was where the accident occurred.

Do you understand that? You are 100% financially liable for any accident if you have insurance coverage. Yes, of course the two drivers will also be held responsible, but they have nothing, so they will lose nothing. You will have the potential of losing everything you own to satisfy the financial obligations incurred by this accident if your insurance coverage isn't enough to cover the entire bill. That means your coverage needs to pay for damage to both of the vehicles,(in addition to the scratch on yours) the community property (the light post and mailbox) and the hospital costs for both of those drivers. Will those drivers be able to sue you for ongoing medical expenses if they require them? Maybe.

This will have the affect of making auto insurance providers pay for 100% of the damages caused by all accidents in which there is the involvement of at least one insured vehicle. If I were an auto insurance provider, I would refuse to provide coverage for WI drivers or any vehicles operating in this state under those conditions. If auto insurers continue to write policies in WI, they will surely become the most expensive policies in the nation. What will this increase do to businesses who require fleet vehicles-cabs, trucking, even the buses used for public transportation in the big cities?

This alone has the potential to so change our state that we may never see it come back. Businesses faced with such liability and labor issues (How can they find a reliable workforce if it's too expensive to drive?) will surely relocate. Auto sales will drop like a rock. Auto insurers will surely go elsewhere. Who wants to be on the hook financially for every auto accident in an entire state? How will that impact our citizens? What subterfuges and stratagems will be employed to find someone with insurance upon whom to place the blame for any accident?

I'm sure Mr. Obama will be pleased with this innovative way to "coerce people out of their cars". I am not. Neither should any citizen of WI. The insurance coverage increase was bad enough given our current economic woes, but the 1% liability is beyond the pale. This will not save any money for the state and does not belong in WI law much less a budget proposal.

"Thou shalt not covet thy neighbour's house, thou shalt not covet thy neighbour's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour's."~Exodus 20:17

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