Buy your teen the same amount of car insurance you buy yourself

The day has arrived when you drive your teen to the DMV to get his or her learner’s permit and then driver’s license.  Scary.  But the scariest thing for a parent is being asked to sign for your child’s driver’s license as a “sponsor.”

Wisconsin law requires that children under 18, with some exceptions, have an adult sponsor in order to get a learner’s permit and driver’s license.  The sponsor is typically a parent. The sponsorship application for a child’s driver’s license requires that a parent agree to be jointly and severally liable for damages caused by the negligence or willful misconduct of the child.  This means that if an accident were to occur, the parents would be held liable as if they caused the accident.  Note too, one parent’s signature typically puts both parents on the hook even if they are divorced.  As a result of Wisconsin’s “sponsorship statute” it is important to protect your family and your assets by purchasing your teen drivers as much car insurance as you buy for yourself. 

A recent appellate court decision shows why adequate insurance is so important.  In Progressive Northern Ins. Co. v. Jacobson, 2011 WI App 140, a minor child caused an accident killing his two passengers.  He owned his car and carried his own car insurance, but it appears it was minimal.  However, since Wisconsin requires a sponsor for a minor’s driver’s license, his mother was his sponsor.  Due to the severity of the damages, the deceased passengers’ estates looked to the mother since she was equally liable under the sponsorship statute. 

The mother sought coverage with her insurance company, Progressive Insurance.  However Progressive sought to escape responsibility arguing that it had no duty to cover her son’s accident, even though she was her son’s sponsor.  Progressive’s insurance policy, like most auto policies in Wisconsin, had a “relative” exclusion and the Court agreed with Progressive and found that the mother had no insurance coverage for her son’s accident.  As a result of being liable for her son’s negligence, she could now be forced to use her own assets (money, home or other property) to pay a judgment.

As a result of the sponsorship statute, my typical recommendation for families is that all cars in a family’s household be insured with the same car insurance company and that each car has liability, uninsured (UM), and underinsured (UIM) limits of at least $250,000 per person.  In addition, I strongly advise anyone with any assets, like a home, to purchase an umbrella insurance policy with UM and UIM coverage for $1 or $2 million. 

Sometimes people ask why UM and UIM coverage is important.  The answer is that such coverage protects you and your family from irresponsible drivers with little or no insurance or assets.  Added coverage is not nearly as expensive as you might think, and if you are sponsoring one or more teen drivers, you are at risk and must protect yourself and your assets.

Wisconsin Personal Injury Lawyer

Governor Doyle's Car Insurance Proposal

In 1995, insurance companies in the Wisconsin Insurance Alliance conned state legislators and the governor into believing that if they changed the law Wisconsin citizens would pay less in car insurance rates. Well, the bill became law and car insurance rates never went up. Oh, does that sound to good to be true? Exactly. What really happened was that Wisconsin citizens LOST many rights they had under their insurance policies and of course, car insurance rates WENT UP.

Here are WIA's members:

A I G
Allied Insurance
Allstate Insurance
American Family Insurance
Ameriprise Auto & Home Ins
Auto Club Insurance Assn
Badger Mutual Insurance
Capitol Indemnity Corp
C N A
Church Mutual Insurance
CUNA Mutual Insurance Group
Farmers Insurance
1st Auto & Casualty Insurance Co
General Reinsurance Corp Kemper Auto & Home
Germantown Mutual Insurance
Homestead Mutual Insurance Co
Integrity Mutual Insurance
Ixonia Mutual Insurance Co
Jewelers Mutual Insurance
League of Wisc Municipalities Mutual
Liberty Mutual Group
Manitowoc Mutual Insurance
Maple Valley Mutual Insurance
McMillan/Warner Mutual Ins
Mount Morris Mutual
Nationwide Indemnity
Old Republic Surety Co
Partners Mutual Insurance Co
ProAssurance Progressive Northern Insurance Cos
QBE Regional/General Casualty
Racine County Mutual Insurance Co
Rural Mutual Insurance Co
SECURA Insurance
Sentry Insurance
S F M
Sheboygan Falls Insurance
Society Insurance
State Auto Insurance Cos
State Farm Insurance
Sugar Creek Mutual Insurance Co
Travelers
United Wisconsin Insurance Co
Waukesha Cty Mutual Insurance
WEA Property & Casualty Co
West Bend Mutual Insurance
Western National Mutual Ins Co
Wilson Mutual Insurance
Wisconsin American Mutual Insurance Co
Wisconsin Assn of Mutual Insurance Cos
Wisconsin County Mutual Insurance Co
Wisconsin Mutual Insurance Co
Wisconsin Reinsurance Corp

Recall Insurance Company Tricks and my recent Car Insurance post.

The Governor's bill, which is in the budget, reverses the insurance companies' 1995 nonsense giving back Wisconsin citizens the rights that were taken away and raises car insurance limits from the 25-year-old $25,000 minimum to $100,000. Who's looking out for you? It's not Wisconsin’s property and casualty insurers. Here, it is absolutely Governor Doyle!

Contact your legislator and let him or her know that you SUPPORT Governor Doyle's Truth in Auto Insurance Law.

Wisconsin Personal Injury Attorney

Insurance Company Tricks

I've blogged on insurance companies discussing their ways, but a new report from the American Association for Justice formalizes and confirms some of what I've said. Check out Tricks of the Trade.

Here's the executive summary (minus the footnotes) of behaviors:

"The U.S. insurance industry has trillions of dollars in assets, enjoys average profits of over $30 billion a year, and pays its CEOs more than any other industry. But insurance companies still engage in dirty tricks and unethical behavior to boost their bottom line even further.

The current economic turmoil affecting the insurance industry onWall Street has only made the outlook bleaker for consumers living on Main Street. Insurance companies are likely to demand huge rate hikes and
refuse more claims than ever.

Some of America’s most well-known insurance companies—the same ones that spend billions on
advertising to earn your trust—have endeavored to deny claims, delay payments, confuse consumers with incomprehensible insurance-speak, and retroactively refuse anyone who may cost them money.

This report describes some of the most egregious ways the insurance industry attempts to make money at the expense of consumers. These are some of the tricks of the trade:

Denying Claims
Some of the nation’s biggest insurance companies—Allstate, AIG, and State Farm among others—have denied valid claims in an attempt to boost their bottom lines. These companies have rewarded employees who successfully denied claims, replaced employees who
would not, and when all else failed, engaged in outright fraud to avoid paying claims.

Delaying Until Death
Many insurance companies routinely delay claims, knowing full well that many policyholders will simply away in safes. Undoubtedly, the most shameful use of delay tactics has been by long-term care insurers, who often take advantage of their policyholders’ age and ill health. In the words of one regulator, "the bottom line is that insurance companies make money when they don’t pay claims…They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die."

Confusing Consumers
Insurance contracts are some of the most dense and incomprehensible contracts a consumer is ever likely to see. More than half of all states have enacted "plain English" laws for consumer contracts, yet many Americans still do not fully understand the risks they are subject to. After Hurricane Katrina, insurance companies used obscure "anti-concurrent" clauses to get out of paying claims. Consumers who purchased hurricane insurance and thought they were covered suddenly found the coverage eliminated by an obscure clause they could not hope to understand.

Discriminating by Credit Score
Increasingly, insurance companies are using credit reports to dictate the premiums consumers pay, or whether they can even get insurance in the first place. The practice penalizes the poor, senior citizens with little credit, and those who have suffered financial crisis through no fault of their own. Insurance companies have denied fiscally responsible people who paid their bills in cash, but refused renewals because of a lack of credit history. Others have seen auto rate hikes near 600 percent despite clean driving records after falling on economic troubles.

Abandoning the Sick
Health insurers looking to cut costs have taken to canceling retroactively, or rescinding, the policies of people whose conditions have become expensive to treat. Some insurance companies have even offered bonuses to employees who meet "cancellation goals." Rescission targets patients in the midst of treatment when they are at their most vulnerable—even cancer patients in the midst of chemotherapy have been targeted.

Canceling for a Call
Many people are rightly reluctant to make small claims on their home insurance for fear their insurance company will raise their premiums. But few realize that insurance companies often refuse to renew a policy because the policyholder did as little as inquire about the possibility of making a claim. Many times an insurance company will count an inquiry over the phone
as the same as a claim, and then they will do everything in their power to drop the policyholder."


Wisconsin Personal Injury Attorney

Worst Insurance Companies

No surprise here that Allstate tops the list of the Worst Insurers for Consumers. Among others listed are Farmers, Liberty Mutual, and State Farm. The report described in the news article confirms much of what I've said about insurers. Buyer beware.

Wisconsin Personal Injury Attorney

Dog Bite Attack & Family Dog Advice

Dog bites infant is the headline from Santa Barbara where an 11-month-old was bitten by the family dog (a pit bull mutt). The dog bite to her face is receiving plastic surgery, but the truth is she's lucky to be alive and the dog bite scars will remain. Now I have a dog, he's a 20-lb Cavalier and he's great. So I do appreciate dogs, just not dog bites:

So for those seeking a family dog, take advice from insurance companies (note: dog bites are usually covered by homeowner's insurance and a Wisconsin umbrella policy). Some insurers have "blacklisted" breeds based on a propensity to cause dog bites.

Allstate is likely not to cover: Akitas, Chows, Dobermans, Huskies, Pit Bulls, Presa Canarios, Rottweilers and Staffordshire Terriers.

AIG: Dobermans, Pit Bulls and Rottweilers.

Liberty Mutual: Akitas, Alaskan Malamutes, Chows, Dobermans, German Shepherds, Huskies, Pit Bulls, Rottweilers and Staffordshire Terriers.

Nationwide: Chows, Dobermans, Pit Bulls, Presa Canarios and Rottweilers.

Thus, my suggestion is to avoid the above breeds, especially if you have children and put them away when children visit to avoid some of the most dangerous dog bites.

Wisconsin Personal Injury Attorney