Wisconsin's Financial Responsibility Requirements

Wisconsin has a financial responsibility law (Chapter 344, Wis. Stat.). It is designed to make sure that any motorist licensed to drive in Wisconsin has insurance or enough money to pay for damages to others that may be caused by a motor vehicle. These requirements may be met through insurance, a surety bond, or self-insurance. Details are available at the Department of Transportation, Motor Vehicle Division, Hill Farms State Office Building, Madison, Wisconsin 53705, http://wisconsindot.gov/.

Bodily Injury Liability Insurance. Bodily injury liability insurance does not protect you or your car directly. If you cause an accident injuring other people, it protects you against their claims up to the stated amounts for medical expenses, lost wages, pain and suffering, and other losses. It will also usually pay if the accident was caused by a member of your family living with you or a person using your auto with your consent.

Property Damage Liability Insurance. Property damage liability insurance pays for any damage up to the stated amount you cause to the property of others such as a crushed fender, broken glass, or a damaged wall or fence. Your insurance will pay for this damage if you were driving your auto or if it was being driven by another person with your consent.

Uninsured Motorist Coverage. Uninsured motorist coverage applies to bodily injury you, your family, and other occupants of your vehicle incur when hit by an uninsured motorist or hit-and-run driver. It also covers you and your family if injured as a pedestrian when struck by an uninsured motorist or hit-and-run driver. It protects you by making sure that money is available to pay for your losses that were caused by someone else.

Uninsured motorist coverage does not cover your property damage and does not protect the other driver. Your insurance company may sue the other driver for any money the company pays you because of the other driver's negligence.

Underinsured Motorist Coverage. This is an optional coverage that increases the personal injury protection to you and the people in your car up to the amount of coverage you purchase. It becomes effective when the party causing an accident has lower limits than you purchase and the accident costs more. The maximum dollars paid is then the difference between the two limits.

For example, assume the underinsured motorist (UIM) limits selected were $100,000 per person and the person causing the accident had limits of $50,000 per person. Under this scenario, you could collect up to $50,000 from the at-fault driver and up to an additional $50,000 (the difference in limits) under your own UIM coverage. UIM coverage typically does not "add" the amount you purchased to the amount available from the person causing the accident.

Insurers are required to notify policyholders who do not have UIM coverage of its availability. The limits of UIM coverage, if accepted after notification, are $50,000 per person and $100,000 per accident.

Medical Expense. This provides medical or funeral expense for people injured or killed in your car. It also covers you and members of your family if hit by a car or injured while riding in another car. Medical expense coverage is usually sold as a single amount such as $1,000. Companies must offer this coverage but you do not have to buy it.