12/23/2011 // Madison, Wisconsin, USA // [email protected] // Gregor McGavin

Between a new state law that slashes the amount of auto insurance motorists must carry and State Farm cutting its overall rates for Wisconsin customers as of mid-January, Online Auto Insurance (OAI) says Badger State customers of the nation’s largest vehicle insurer may have an opportunity to maintain heightened levels of coverage and still come out on top financially.

On one hand, legislation that took effect last month means Wisconsinites are legally required to buy only half the amount of liability coverage they were previously obligated to purchase. On the other, an overall rate cut by State Farm will reduce premiums for policyholders statewide by an average of 2.6 percent.

That could create a bit of a quandary for State Farm customers who are wondering whether they should take advantage of any potential savings to beef up their policies to the recommended insurance coverage levels that will protect them in the event of a serious accident.

Wisconsin consumers who buy or renew vehicle policies must now carry only enough liability insurance to pay for damages of up to $50,000 for bodily injury damages per accident ($25,00 per person), plus a minimum of up to $10,000 in property damage caused by policyholders.

Those minimum levels—referred to in insurer lingo as 25/50/10—replace the previous minimums of 50/100/15. And drivers need no longer carry underinsured motorist coverage and must purchase just 25/50 in uninsured motorist coverage, rather than the previous minimum of 100/300.

Source: http://oci.wi.gov/pub_list/pi-057.pdf

But industry experts caution that carrying only the minimum liability coverage required by law may not provide enough financial protection in the event of a crash, and drivers with bills that exceed their policy limits could wind up having to pay out of pocket.

And with State Farm announcing it is paring its overall rates for Wisconsin policyholders by an average of 2.6 percent as of Jan. 16, OAI advises those consumers that they may want to think about investing any extra money in expanded vehicle coverage.

Safety-conscious consumers in Wisconsin and other states should also check out coverage types beyond mere liability, such as collision and comprehensive, which will cost more than a bare-bones policy but will also provide greater peace of mind.

To learn more about this and other safety and car insurance issues, readers can go to http://www.onlineautoinsurance.com/coverage/ where they will find informative resource pages and a helpful rate-comparison generator.

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