For many of us in Wisconsin, summer and fall is full of travel, recreation, and family time. That means more Wisconsinites are on the road traveling to cabins and lakes, or out hitting the trails on ATVS.

Unfortunately, family vacations also can be a dangerous when it comes to the roads, lakes, and trails. According to the American Automobile Association, summer is the most dangerous time of the year for teen drivers.

On top of that, the amount of distracted driving crashes rise year after year and in Wisconsin a distracted driving case happens every 22 minute, according to Zero in Wisconsin.

Underinsured Motorist Coverage in Wisconsin

Being out on the roads unfortunately means your chances of being in an accident are increased. While there is generally not much you can do to prevent an accident caused by someone else, you should make sure you and your family are insured against someone injuring you with minimal insurance coverage.

In Wisconsin, the minimum coverage is only $25,000 for person and $50,000 per accident.¹ This low level of coverage can be problematic if you are hit and injured by another driver. If the other driver only has the minimum coverage in Wisconsin of $25,000, that may not be enough insurance to cover your medical expenses and lost time from work.

However, in Wisconsin you can purchase underinsured motorist coverage (UIM). This UIM coverage provides coverage in the event of another driver injuring you, but not having enough coverage to take care of the damage and injuries they caused, like medical expenses and lost wages.

In Wisconsin, there is no requirement for you to purchase UIM coverage, but your insurance company is required to let you know that UIM coverage is available for you and your family. Wisconsin law also requires that if UIM is purchased, the minimum amount must be $50,000 per person and $100,000 per accident.²

It is important to note that $50,000 is the maximum you can access if you are injured. The $100,000 per accident amount just means that basically no matter how many different people are injured in that accident, the total to be covered will be no more than $100,000. If three people were injured, the total underinsured coverage for all in that accident would only be $100,000. This could result in each person actually receiving less than $50,000 in coverage.

Offset Coverage

Another important concept to remember is that Wisconsin law allows for the offset of the UIM coverage with the liability coverage from the at-fault driver’s coverage. This means that instead of adding both policies together, you actually only get the maximum of the larger policy. So, if the at-fault driver only had the $25,000 minimum coverage and you had the minimum $50,000 UIM coverage, you can generally only get $50,000, as the $25,000 from the other driver offsets your UIM limits (basically is subtracted against your UIM policy).

This is a tricky law and often not explained by the insurance company. So many insurance buyers mistakenly think they get to add both together, and in effect have $50,000 coverage on top of the other driver’s insurance. In some cases, a driver may find out that he or she has no additional coverage on top of the at-fault driver’s insurance because the at-fault driver has the same amount (or more coverage) than the UIM coverage.

An example would be when the at-fault driver has $50,000 of liability insurance coverage and injures and you have $50,000 UIM coverage. The net result of this is $50,000 total coverage, meaning that you don’t even get to access the $50,000 of UIM coverage you have been paying for.

Protecting Yourself and Your Family

What is the solution to protecting you and your family financially against an underinsured driver?

First, check your insurance declaration page on your policy to make sure that you have elected for underinsured motorist coverage. If you do not have UIM coverage, reach out to your insurance agent right away.

Second, if you do have underinsured motorist coverage, make sure that it is enough to cover a substantial amount of medical bills and lost wages. $100,000 is recommended by many, but you may want to even consider $250,000 or more.

Third, check to see if your insurance company sells umbrella insurance policies that provide underinsured motorist coverage. Umbrella policies can be added to your existing auto policy. This can be a good additional financial safety measure by adding additional coverage beyond your typical auto insurance.

If your insurance company doesn’t offer these, you should check with other companies or agents, as this type of coverage often will extend beyond $1 million (as allowed by Wis. Stat. section 632.32(cm)) and can be very helpful in the event of an accident that requires surgery or significant time away from work.

The physical, emotional, and financial toll of being hit by another driver can be significant, so control what you can and make sure you are protected financially in the event of an underinsured driver.

This article was originally published on the State Bar of Wisconsin’s Agriculture Law and Rural Practice Blog of the Solo/Small Firm & General Practice Section. Visit the State Bar sections or the Solo/Small Firm & General Practice Section webpages to learn more about the benefits of section membership.

Endnotes

¹ Wis. Stat. § 344.15.

² Wis. Stat. § 632.32 (4m).