Imagine, for a moment, that you've made some long overdue improvements to your house. Your neighbor suggests that to protect the value of your investment you should consider additional home insurance. Good idea, you think.
Your neighbor says, "You might want to increase your insurance coverage from $150,000 to $200,000." You dial up your insurance agent for a price quote because you know that buying more insurance is going to cost more money. More coverage equals a higher premium and in the end you decide that more insurance is not worth the price. But your neighbor insists that you should not have to pay more for additional coverage. "Any premium increases are due to the business decisions of insurance providers …"
Knowing what you know about your insurance policies, do you believe him?
Yet that is what Assembly Majority Leader Rep. Tom Nelson and his Democrat cohorts in the state assembly want you to believe. In fact that is exactly Nelson's comment regarding legislature's edict in the state budget that increased the mandatory minimum amounts of liability coverage, increased the mandatory minimum amounts of uninsured-driver coverage and mandated coverage for underinsured drivers.
Nelson's attempt to duck responsibility for a forecasted statewide 40 percent increase in auto insurance ignores Economics 101. It is simple pricing rule, whether the product is a cup of coffee or an insurance policy. If you buy the larger size, it is going to cost more. Jim Guidry of the Office of the Commission of Insurance spelled it out when he told the Associated Press that premiums in general are expected to go up for consumers who purchased only the minimum limits because of the changes.
Nelson and his colleagues, including Rep. Gordon Hintz of Oshkosh, are not telling the truth by shifting the blame to the insurance companies. If, by some chance, they actually believe that forcing consumers to buy more insurance will not raise rates, there is a serious problem in Assembly.
First, it was wrong to stick the insurance mandate in the budget bill. A public policy initiative that significant deserves the benefit of a legislative hearing and debate. Second, it creates a mandate that many out-of-work motorists will not be able to afford. Third, it shows the Democrats as true hypocrites. Remember their press releases tout that the recently passed budget did not increase taxes on Wisconsin residents. OK, the insurance mandate is technically not a tax, but it will take money out of your pocket just the same as a tax would.
Fortunately there is still a modicum of common sense in the legislature. Sen. Mike Ellis, R-Neenah, is drafting legislation that will roll back those insurance mandates. In announcing his legislation — let's call it the 'Ellis Auto Insurance Sanity Act' — the veteran lawmaker said, "Under the new law, Wisconsin drivers will go from having among the lowest insurance rates in the nation to having among the highest."
Ellis is right and the Democrats are wrong and should be ashamed.
The Final Thought: Insurance mandate will lead to higher premiums and should be repealed.
