AB 4

Proof of financial responsibility

Under former law, prior to

2009 Wisconsin Act 28

(the biennial budget act),

motor vehicles operated in this state were not required to be covered by policies of

bodily injury and property damage liability insurance, but owners and operators of

motor vehicles involved in accidents were subject to certain financial responsibility

requirements. The biennial budget act retained and modified these financial

responsibility requirements following a motor vehicle accident while also requiring

insurance coverage for motor vehicles operated in this state.

Under current law, if a motor vehicle accident results in injury, death, or

property damage of $1,000 or more, the Department of Transportation (DOT) is

required to notify the operator and owner of the vehicle involved in the accident that

the person must deposit with DOT security for the accident in an amount specified

by DOT, which DOT has determined is sufficient to satisfy any judgment for damages

resulting from the accident. Unless an exception applies, if a person fails to timely

deposit security after this notice, DOT must suspend the person's operating privilege

if the person was the vehicle operator and suspend all vehicle registrations of the

person if the person was the vehicle owner. One of the exceptions is that the person

provides proof of financial responsibility. In addition, if DOT receives a certified copy

of a judgment for damages of $500 or more arising out of a motor vehicle accident,

DOT must immediately suspend the operating privilege and all registrations of the

person against whom the judgment was rendered unless the person can provide proof

of financial responsibility. In both situations, proof of financial responsibility

includes coverage under a motor vehicle liability insurance policy with the following

minimum limits, exclusive of interest and costs, for any single accident:

1. Before January 1, 2010, $25,000 for bodily injury to or death of one person,

$50,000 for bodily injury to or death of more than one person, and $10,000 for

property damage.

2. From January 1, 2010, to December 31, 2016, $50,000 for bodily injury to or

death of one person, $100,000 for bodily injury to or death of more than one person,

and $15,000 for property damage.

3. After December 31, 2016, the limits specified in item 2., above, adjusted for

inflation and published by DOT.

This bill decreases the minimum limits required under a policy that is

acceptable proof of financial responsibility to $25,000 for bodily injury to or death of

one person, $50,000 for bodily injury to or death of more than one person, and $10,000

for property damage. The bill also eliminates inflation adjustments for these limits

and eliminates statutory language that these limits are determined exclusive of

interest and costs.