AAI Urges Wis. Lawmakers to Reject Mandatory Auto Bill

June 23, 2003

A mandatory automobile insurance bill being considered by a Wisconsin legislative panel is unnecessary and will create more problems than it solves, according to the Alliance of American Insurers.

The bill, AB 384, would reportedly require all drivers in the state to carry auto liability insurance.

In testimony yesterday before the state Assembly Committee on Transportation, Lynn Knauf, Alliance personal lines policy manager, stressed that throughout history, compulsory liability insurance laws “have done little to remove uninsured drivers from the roads and actually have driven up the cost of insurance for responsible motorists.

“While the Alliance agrees that all drivers should be financially responsible for their actions and that purchasing auto insurance is the best way for most people to accomplish this, a certain number of people will not always keep their auto insurance in force. But making auto insurance mandatory is not the answer. Mandatory auto insurance laws do not eliminate all uninsured drivers from the road. Instead they open a Pandora’s box of costly regulation, and ultimately, additional legislation, in the quest to enforce an unenforceable law.”

“This is a solution in search of a problem,” added Bill Schroeder, vice president of the Alliance’s Midwest Region. “Wisconsin actually has a very low estimated percentage of uninsured drivers (approximately 10.8 percent) versus a national average of about 14 percent. In addition, auto insurance is extremely affordable in the state. According to an NAIC ranking, only eight states have a lower average auto premium than Wisconsin.”

Current Wisconsin financial responsibility law requires future proof of insurance for those found to be uninsured at the time of loss. This targets those found to be uninsured – rather than targeting all drivers.

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