Despite the strong contention of the Wisconsin insurance industry that car insurance premiums would be likely to rise following the passage of increased coverage standards, a report from consumer watchdog Citizen Action says that these claims gravely mischaracterize the new law.
On the contrary, Citizen Action says, car insurance has been a highly profitable business in the state, taking in money at a 25 percent greater rate than the national average. At the same time, according to the group, premiums were among the lowest in the country, fourth from the bottom.
Industry assertions that new coverage standards would increase premiums by an average of 33 percent are "outrageously misleading," according to Citizen Action. Premium increases for 2010 were actually lower than the historical average rate and did not even keep pace with the rate of inflation, the group's report finds.
Citizen Action's report is based on state data obtained from the Office of the Insurance Commissioner, which, it says, clearly demonstrates that not only have consumer protections enacted as part of the 2009 state budget failed to make a negative impact on the finances of policyholders, there may actually have been a net saving.
Citizen Action says that property and casualty insurers, over the course of the past four years, have overcharged the state's customers by more than $200 billion, primarily by means of what the group alleges is a systematic effort to avoid paying many legitimate claims in full.
The controversial new auto insurance legislation was the first since the early 1980s to raise mandatory coverage minimums on policies, the group says. It also made auto insurance mandatory in the state.