Chapter 632

632.32(4m)(a) (a) Except as provided in par. (e), an insurer writing policies that insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by a person arising out of the ownership, maintenance, or use of a motor vehicle shall provide to one named insured under each such insurance policy that goes into effect after November 1, 2011, that is written by the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this paragraph only one time and in conjunction with the delivery of the policy.

632.32(4m)(b) (b) Acceptance or rejection of underinsured motorist coverage by a person after being notified under par. (a) need not be in writing. The absence of a premium payment for underinsured motorist coverage is conclusive proof that the person has rejected such coverage. The rejection of such coverage by the person notified under par. (a) shall apply to all persons insured under the policy, including any renewal of the policy.

632.32(4m)(c) (c) If a person rejects underinsured motorist coverage after being notified under par. (a), the insurer is not required to provide such coverage under a policy that is renewed to the person by that insurer unless an insured under the policy subsequently requests such underinsured motorist coverage in writing.

632.32(4m)(d) (d) If an insured accepts underinsured motorist coverage, the insurer shall include the coverage in limits of at least $50,000 per person and $100,000 per accident.

632.32(4m)(e) (e) This subsection does not apply to a commercial liability policy if the coverage it provides for the insured’s liability arising out of the maintenance or use of a motor vehicle is limited to coverage for motor vehicles that are not owned motor vehicles, or to an umbrella or excess liability policy. If a commercial liability policy or an umbrella or excess liability policy provides underinsured motorist coverage, however, the coverage must have limits of at least those specified in par. (d).

632.32(5) (5) Permissible provisions.

632.32(5)(a) (a) A policy may limit coverage to use that is with the permission of the named insured or, if the insured is an individual, to use that is with the permission of the named insured or an adult member of that insured’s household other than a chauffeur or domestic servant. The permission is effective even if it violates s. 343.45 (2) and even if the use is not authorized by law.

632.32(5)(b) (b) If the policy is issued to anyone other than a motor vehicle handler, it may limit the coverage afforded to a motor vehicle handler or its officers, agents or employees to the limits under s. 344.01 (2) (d) and to instances when there is no other valid and collectible insurance with at least those limits whether the other insurance is primary, excess or contingent.

632.32(5)(c) (c) If the policy is issued to a motor vehicle handler, it may restrict coverage afforded to anyone other than the motor vehicle handler or its officers, agents or employees to the limits under s. 344.01 (2) (d) and to instances when there is no other valid and collectible insurance with at least those limits whether the other insurance is primary, excess or contingent.

632.32(5)(d) (d) If a motor vehicle covered by the policy is sold or transferred, the purchaser or transferee is not an additional insured unless the consent of the insurer is endorsed on the policy.

632.32(5)(e) (e) A policy may provide for exclusions not prohibited by sub. (6) or other applicable law. Such exclusions are effective even if incidentally to their main purpose they exclude persons, uses or coverages that could not be directly excluded under sub. (6) (b).

632.32(5)(f) (f) A policy may provide that, regardless of the number of policies involved, vehicles involved, persons covered, claims made, vehicles or premiums shown on the policy, or premiums paid, the limits for any coverage under the policy may not be added to the limits for similar coverage applying to other motor vehicles to determine the limit of insurance coverage available for bodily injury or death suffered by a person in any one accident.

632.32(5)(g) (g) A policy may provide that the maximum amount of uninsured motorist coverage, underinsured motorist coverage, or medical payments coverage available for bodily injury or death suffered by a person who was not using a motor vehicle at the time of an accident is the highest single limit of uninsured motorist coverage, underinsured motorist coverage, or medical payments coverage, whichever is applicable, for any motor vehicle with respect to which the person is insured.

632.32(5)(i) (i) A policy may provide that the limits under the policy for uninsured motorist coverage or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by any of the following that apply:

632.32(5)(i)1. 1. Amounts paid by or on behalf of any person or organization that may be legally responsible for the bodily injury or death for which the payment is made.

632.32(5)(i)2. 2. Amounts paid or payable under any worker’s compensation law.

632.32(5)(i)3. 3. Amounts paid or payable under any disability benefits laws.

632.32(5)(j) (j) A policy may provide that any coverage under the policy does not apply to a loss resulting from the use of a motor vehicle that meets all of the following conditions:

632.32(5)(j)1. 1. Is owned by the named insured, or is owned by the named insured’s spouse or a relative of the named insured if the spouse or relative resides in the same household as the named insured.

632.32(5)(j)2. 2. Is not described in the policy under which the claim is made.

632.32(5)(j)3. 3. Is not covered under the terms of the policy as a newly acquired or replacement motor vehicle.

632.32(6) (6) Prohibited provisions.

632.32(6)(a) (a) No policy issued to a motor vehicle handler may exclude coverage upon any of its officers, agents or employees when any of them are using motor vehicles owned by customers doing business with the motor vehicle handler.

632.32(6)(b) (b) No policy may exclude from the coverage afforded or benefits provided:

632.32(6)(b)1. 1. Persons related by blood, marriage or adoption to the insured.

632.32(6)(b)2. 2.

632.32(6)(b)2.a. a. Any person who is a named insured or passenger in or on the insured vehicle, with respect to bodily injury, sickness or disease, including death resulting therefrom, to that person.

632.32(6)(b)2.b. b. This subdivision, as it relates to passengers, does not apply to a policy of insurance for a motorcycle as defined in s. 340.01 (32) or a moped as defined in s. 340.01 (29m) if the motorcycle or moped is designed to carry only one person and does not have a seat for any passenger.

632.32(6)(b)3. 3. Any person while using the motor vehicle, solely for reasons of age, if the person is of an age authorized to drive a motor vehicle.

632.32(6)(b)4. 4. Any use of the motor vehicle for unlawful purposes, or for transportation of liquor in violation of law, or while the driver is under the influence of an intoxicant or a controlled substance or controlled substance analog under ch. 961 or a combination thereof, under the influence of any other drug to a degree which renders him or her incapable of safely driving, or under the combined influence of an intoxicant and any other drug to a degree which renders him or her incapable of safely driving, or any use of the motor vehicle in a reckless manner. In this subdivision, “drug” has the meaning specified in s. 450.01 (10).

632.32(6)(c) (c) No policy may limit the time for giving notice of any accident or casualty covered by the policy to less than 20 days.

632.32 History History: 1975 c. 375, 421; 1979 c. 102, 104; 1979 c. 177 ss. 67, 68; 1979 c. 221; 1981 c. 284; 1983 a. 243, 459; 1985 a. 146 s. 8; 1995 a. 21, 448; 1997 a. 48; 1999 a. 31, 162; 2007 a. 168; 2009 a. 28, 342; 2011 a. 14, 224.

632.32 Note NOTE: Wisconsin Statutes 1979 to 2009 all contain an extensive 1979 Legislative Council Note regarding the recodification of prior statutes by 1979 Laws, ch. 102, as this section.

632.32 Note NOTE: 1995 Wis. Act 21 made significant changes in the law, effective July 15, 1995, regarding the “stacking” of insurance policy coverage.

632.32 Note NOTE: 2009 Wis. Act 28 made significant changes to this section, effective November 1, 2009, regarding uninsured and underinsured motorist coverage, as well as stacking and reducing insurance policy coverage.

632.32 Note NOTE: 2011 Wis. Act 14 made significant changes to this section, effective November 1, 2011, regarding uninsured and underinsured motorist coverage, as well as stacking and reducing insurance policy coverage, including the reversal of many of the changes made by 2009 Wis. Act 28.

632.32 Annotation A “family exclusion clause” valid in the state of policy issuance will be given effect in Wisconsin. Knight v. Heritage Mutual Insurance Co., 71 Wis. 2d 821, 239 N.W.2d 348 (1976).

632.32 Annotation The concept of permissive use is the same regardless of whether it arises under the “any motor vehicle” coverage section of s. 344.33 (2) or the omnibuses coverage statute. Gross v. Joecks, 72 Wis. 2d 583, 241 N.W.2d 727 (1976).

632.32 Annotation A “fellow employee” exclusion clause is only valid if the tort-feasor and injured party are employees of the named insured and the employer is required to provide worker’s compensation coverage. Dahm v. Employers Mutual Liability Insurance Co. of Wisconsin, 74 Wis. 2d 123, 246 N.W.2d 131 (1976).

632.32 Annotation A spouse who was not a party to the contract, reasonably believing that coverage existed after the insured spouse’s death, must be given a grace period before having to comply with technical, not commonly known provisions of a policy. Handal v. American Farmers Mutual Casualty Co., 79 Wis. 2d 67, 255 N.W.2d 903 (1977).

632.32 Annotation Generally when a permissive user of a vehicle is the real owner of the car for all practical purposes, but not the named insured, and the permissive user grants permission for a third person to use the vehicle, the named insured’s permission is implied. American Family Mutual Insurance Co. v. Osusky, 90 Wis. 2d 142, 279 N.W.2d 719 (Ct. App. 1979).

632.32 Annotation Injury to a police officer who was stabbed while unloading beer cans from an automobile did not arise out of use of the automobile. Tomlin v. State Farm Mutual Automobile Liability Insurance Co., 95 Wis. 2d 215, 290 N.W.2d 285 (1980).

632.32 Annotation Third parties may recover against an insurer even though the insured’s fraudulent application voided the policy under s. 631.11. Rauch v. American Family Insurance Co., 115 Wis. 2d 257, 340 N.W.2d 478 (1983).

632.32 Annotation Arguments that “reduction clauses” in uninsured motorist provisions were invalid and that a release did not bar a subsequent claim against the insurer for bad faith were frivolous. Radlein v. Industrial Fire & Casualty Insurance Co., 117 Wis. 2d 605, 345 N.W.2d 874 (1984).

632.32 Annotation A “drive other car” exclusion that prohibited stacking of uninsured motorist benefits against the same insurer was voided by s. 631.43. Welch v. State Farm Mutual Automobile Insurance Co., 122 Wis. 2d 172, 361 N.W.2d 680 (1985).

632.32 Annotation A reducing clause in an uninsured motorist provision was voided by former sub. (4) (a), 1979 stats. Nicholson v. Home Insurance Cos., 137 Wis. 2d 581, 405 N.W.2d 327 (1987).

632.32 Annotation Because uninsured motorist coverage is “personal and portable,” the claimant was covered by a policy on a vehicle not involved in the accident. Parks v. Waffle, 138 Wis. 2d 70, 405 N.W.2d 690 (Ct. App. 1987).

632.32 Annotation Loss of consortium is not a separate bodily injury under a policy’s “each person” limitation. Landsinger v. American Family Mutual Insurance Co., 142 Wis. 2d 138, 417 N.W.2d 899 (Ct. App. 1987).

632.32 Annotation An insurer could not avoid uninsured motorist coverage based on a policy provision excluding resident relatives who own their own car. Hulsey v. American Family Mutual Insurance Co., 142 Wis. 2d 639, 419 N.W.2d 288 (Ct. App. 1987).

632.32 Annotation A reducing clause and “regular use” exclusionary clause violated former sub. (4) (a), 1985 stats. Niemann v. Badger Mutual Insurance Co., 143 Wis. 2d 73, 420 N.W.2d 378 (Ct. App. 1988).

632.32 Annotation An auto insurer who pays under an uninsured motorist provision is not a tortfeasor or tortfeasor’s insurer against whom an injured insured’s medical insurer may assert a subrogation claim. Employers Health Insurance v. General Casualty Co. of Wisconsin, 161 Wis. 2d 937, 469 N.W.2d 172 (1991).

632.32 Annotation A policy may expand but not reduce uninsured motorist coverage. The policy, not the statute, determines coverage beyond the statutory requirements. Fletcher v. Aetna Casualty & Surety Co., 165 Wis. 2d 350, 477 N.W.2d 90 (Ct. App. 1991).

632.32 Annotation A policy cannot limit uninsured motorist coverage to occupants of vehicles. St. Paul Mercury Insurance Co. v. Zastrow, 166 Wis. 2d 423, 480 N.W.2d 8 (1992).

632.32 Annotation If the insurer of a vehicle becomes insolvent, the vehicle is uninsured under former sub. (4) (a) 2., 1987 stats., even though an insurance guaranty association assumes the liability of the insolvent insurer. Fritsche v. Ford Motor Credit Co., 171 Wis. 2d 280, 491 N.W.2d 119 (Ct. App. 1992).

632.32 Annotation To take advantage of sub. (5) (c), a policy must include language that either says permissive users are restricted to the minimum statutory limits of liability or that users may not avail themselves of the policy unless there is no other valid collectible insurance. Carrell v. Wolken, 173 Wis. 2d 426, 496 N.W.2d 651 (Ct. App. 1992). See also Henry v. General Casualty Co. of Wisconsin, 225 Wis. 2d 849, 593 N.W.2d 913 (Ct. App. 1999), 98-2428; Pemper v. Hoel, 2004 WI App 67, 271 Wis. 2d 442, 677 N.W.2d 705, 03-2134.

632.32 Annotation A reducing clause that is unavailable to a tortfeasor and seeks to reduce uninsured motorist benefits by amounts received under worker’s compensation is invalid. United Fire & Casualty Co. v. Kleppe, 174 Wis. 2d 637, 498 N.W.2d 226 (1993).

632.32 Annotation Adult members of a named insured’s household are capable of giving themselves permission to drive under sub. (5). When the named insured is a corporation and the insurer knows the vehicle is owned by a corporation employee, the owner will be treated as the named insured under sub. (5). Home Insurance Co. v. Phillips, 175 Wis. 2d 104, 499 N.W.2d 193 (Ct. App. 1993).

632.32 Annotation When a premium has been paid for underinsured motorist coverage under which no benefits may ever be paid due to the application of policy definitions, the coverage is illusory and against public policy. Hoglund v. Secura Insurance, 176 Wis. 2d 265, 500 N.W.2d 354 (Ct. App. 1993).

632.32 Annotation Despite policy restrictions to the contrary, under sub. (3) separate coverage must be provided to both a named insured and an additional insured when both are actively negligent. Iaquinta v. Allstate Insurance Co., 180 Wis. 2d 661, 510 N.W.2d 715 (Ct. App. 1993).

632.32 Annotation Former sub. (4) (a), 1991 stats., does not require the named insured in commercial fleet policies, if the named insured is a corporation or government entity, to be interpreted as including all of the entity’s employees. Meyer v. City of Amery, 185 Wis. 2d 537, 518 N.W.2d 296 (Ct. App. 1994).

632.32 Annotation The uninsured motorist coverage requirements of this section are inapplicable to self-insured entities under s. 344.16. Classified Insurance Co. v. Budget Rent-A-Car of Wisconsin, Inc., 186 Wis. 2d 478, 521 N.W.2d 177 (Ct. App. 1994).

632.32 Annotation Sub. (3) (a) does not apply to uninsured motorist coverage so that a permissive user is entitled to increased coverage limits purchased for specifically named persons not including the user. American Hardware Mutual Insurance Co. v. Steberger, 187 Wis. 2d 682, 523 N.W.2d 187 (Ct. App. 1994).

632.32 Annotation A medical insurer with subrogation rights may be an injured person under former sub. (4), 1991 stats. An auto insurance policy providing that uninsured motorist coverage does not apply to persons claiming by right of subrogation impermissibly reduces coverage that the statute mandates for injured persons. WEA Insurance Corp. v. Freiheit, 190 Wis. 2d 111, 527 N.W.2d 363 (Ct. App. 1994).

632.32 Annotation No policy issued pursuant to the ch. 344 financial responsibility statutes may exclude coverage for persons related by blood or marriage to the operator as mandated by sub. (6) (b) 1. Bindrim v. Colonial Insurance Co., 190 Wis. 2d 525, 527 N.W.2d 320 (1995).

632.32 Annotation This section does not prevent the exclusion of coverage of vehicles used solely on the insured’s premises. Rea v. Transportation Insurance Co., 191 Wis. 2d 271, 528 N.W.2d 79 (Ct. App. 1995).

632.32 Annotation This section does not distinguish between an owner and a named insurer. A policy that excludes coverage to the owner of a vehicle covered by the policy violates this section. Kettner v. Wausau Insurance Cos., 191 Wis. 2d 723, 530 N.W.2d 399 (Ct. App. 1995).

632.32 Annotation When an insurer defines uninsurance as including underinsurance, all case law concerning an insurer’s duties and limitations in an uninsurance situation apply. Kuhn v. Allstate Insurance Co., 193 Wis. 2d 50, 532 N.W.2d 124 (1995).

632.32 Annotation An uninsured motorist policy that restricted coverage to cases when the insured is “hit” or “struck” was void. A bite by a dog tied in a parked vehicle was the result of use of the vehicle and subject to coverage. Trampf v. Prudential Property & Casualty Co., 199 Wis. 2d 380, 544 N.W.2d 596 (Ct. App. 1996), 95-0264.

632.32 Annotation Under the subrogation provision of former sub. (4) (b), 1995 stats., there is no requirement that the insurer plead setoff or file a counterclaim in order to recover payments made to or on behalf of its insured. Jones v. Aetna Casualty & Surety Co., 212 Wis. 2d 165, 567 N.W.2d 904 (Ct. App. 1997), 96-1183.

632.32 Annotation When the named insured is a corporation, but the insurer knows the covered vehicles are owned by individuals and used by family members, this section does not distinguish between the owner of the vehicle and the named insured in determining coverage. Greene v. General Casualty Co. of Wisconsin, 216 Wis. 2d 152, 576 N.W.2d 56 (Ct. App. 1997), 96-2578.

632.32 Annotation Former sub. (4), 1993 stats., does not prohibit the application of a policy arbitration clause to a disputed claim under the policy’s uninsured motorist clause. Jones v. Poole, 217 Wis. 2d 116, 579 N.W.2d 739 (Ct. App. 1998), 97-1430.

632.32 Annotation Because a business operates under a variety of “d/b/a” designations and provides a spectrum of services, some of which qualify under sub. (5) (c) and some of which do not, does not operate to bar the coverage restrictions under that paragraph. That a policy names a “d/b/a” designation does not prevent looking to the entire legal entity to apply sub. (5) (c). Binon v. Great Northern Insurance Co., 218 Wis. 2d 26, 580 N.W.2d 370 (Ct. App. 1998), 97-0710.

632.32 Annotation Neither statutes nor case law expressly prohibit territorial limitations on uninsured motorist coverage. A clause restricting the territorial application of uninsured motorist coverage is valid. Clark v. American Family Mutual Insurance Co., 218 Wis. 2d 169, 577 N.W.2d 790 (1998), 97-0970.

632.32 Annotation No hit and run under former sub. (4) (a) 2. b., 1995 stats., occurred when the insured’s vehicle was struck by ice that dislodged from an unidentified truck as it passed. Dehnel v. State Farm Mutual Automobile Insurance Co., 231 Wis. 2d 14, 604 N.W.2d 575 (Ct. App. 1999), 98-3187.

632.32 Annotation Former sub. (4), 1997 stats., required uninsured motorist coverage when a detached piece of an unidentified motor vehicle was propelled into the insured’s motor vehicle by an unidentified motor vehicle. Theis v. Midwest Security Insurance Co., 2000 WI 15, 232 Wis. 2d 749, 606 N.W.2d 162, 98-2552.

632.32 Annotation Although only one parent was the named insured under an uninsured motorist insurance policy paying benefits for the wrongful death of their child, s. 895.04 required payment of the proceeds to both parents. The purpose of the coverage is to reimburse the victim. If the victim is deceased, the compensation must go to the victim’s survivors, not to other insureds. Bruflat v. Prudential Property & Casualty Insurance Co., 2000 WI App 69, 233 Wis. 2d 523, 608 N.W.2d 371, 99-2049.

632.32 Annotation Sub. (5) (j) allows “drive other car” exclusions in only very narrow and specific circumstances. It did not allow exclusion of uninsured motorist coverage for an insured injured while occupying a fire truck in the course of employment. Blazekovic v. City of Milwaukee, 2000 WI 41, 234 Wis. 2d 587, 610 N.W.2d 467, 98-1821. See also Nischke v. Aetna Health Plans, 2008 WI App 190, 314 Wis. 2d 774, 763 N.W.2d 554, 08-0807.

632.32 Annotation Neither sub. (6) nor s. 344.33 requires an automobile insurance policy to include motorcycle coverage. Beerbohm v. State Farm Mutual Automobile Insurance Co., 2000 WI App 105, 235 Wis. 2d 182, 612 N.W.2d 338, 99-1784.

632.32 Annotation No statute requires a self-insured entity under s. 344.16 to provide uninsured motorist coverage as part of the optional insurance it offers to its customers. Prophet v. Enterprise Rent-A-Car Co., 2000 WI App 171, 238 Wis. 2d 150, 617 N.W.2d 225, 99-0776.

632.32 Annotation A hit and run under former sub. (4) (a) 2. b., 1993 stats., requires: 1) an unidentified motor vehicle that; 2) is involved in a “hit;” and 3) “runs” from the accident scene. Physical contact must be present. A hit and run occurs when an unidentified vehicle hits an intermediate vehicle, propelling it into the insured vehicle. Smith v. General Casualty Insurance Co., 2000 WI 127, 239 Wis. 2d 646, 619 N.W.2d 882, 98-1849.

632.32 Annotation This section applies only to policies issued and delivered in Wisconsin. Danielson v. Gasper, 2001 WI App 12, 240 Wis. 2d 633, 623 N.W.2d 182, 00-0950.

632.32 Annotation When underinsured motorist coverage in the amount of $25,000 was contracted for in violation of the requirement for $50,000 coverage under former sub. (4m) (d), 1995 stats., the higher level of coverage was read into the policy under s. 631.15 (3m), even though it was not reflected in the premium paid. Brunson v. Ward, 2001 WI 89, 245 Wis. 2d 163, 629 N.W.2d 140, 98-3002.

632.32 Annotation The statute of limitations for subrogation claims under sub. (4) (a) 3. [now sub. (4) (c)] is the statute of limitations on the underlying tort. Schwittay v. Sheboygan Falls Mutual Ins. Co., 2001 WI App 140, 246 Wis. 2d 385, 630 N.W.2d 772, 00-2445.

632.32 Annotation Sub. (6) (a) was applicable to a general liability policy that contained an endorsement for non-owned liability coverage. Heritage Mutual Insurance Co. v. Wilber, 2001 WI App 247, 248 Wis. 2d 111, 635 N.W.2d 631, 01-0017.

632.32 Annotation An underinsured motorist provision that required the named insured to be an occupant of an insured vehicle violated sub. (6) (b) 2. a. because the occupancy requirement had the effect of excluding coverage for a named insured. Mau v. North Dakota Insurance Reserve Fund, 2001 WI 134, 248 Wis. 2d 1031, 637 N.W.2d 45, 00-1369. See also Ruenger v. Soodsma, 2005 WI App 79, 281 Wis. 2d 228, 695 N.W.2d 840, 04-1795.

632.32 Annotation An underinsured motorist provision that required the named insured to be an occupant of an insured vehicle was a “drive other car” exclusion under sub. (5) (j) because it had the effect of excluding coverage for a named insured not occupying the insured vehicle. Because the vehicle was a rental vehicle, it did not meet the requirement of sub. (5) (j) 1. that a vehicle subject to a permissible “drive other car” exclusion must be owned by a named insured or related party. Mau v. North Dakota Insurance Reserve Fund, 2001 WI 134, 248 Wis. 2d 1031, 637 N.W.2d 45, 00-1369.

632.32 Annotation For actions seeking coverage under an underinsured motorist policy, the statute of limitations begins to run from the date of loss, which is the date on which a final resolution is reached in the underlying claim against the tortfeasor, be it through denial of that claim, settlement, judgment, execution of releases, or other form of resolution, whichever is the latest. Yocherer v. Farmers Insurance Exchange, 2002 WI 41, 252 Wis. 2d 114, 643 N.W.2d 457, 00-0944.

632.32 Annotation Sub. (3) (b) does not extend policy-limits protection to both the tortfeasor and the person or persons vicariously liable for the tortfeasor’s wrongdoing. A person to whom the negligence of another is imputed is not entitled to separate liability coverage. Folkman v. Quamme, 2003 WI 116, 264 Wis. 2d 617, 665 N.W.2d 857, 02-0261.

632.32 Annotation Sub. (6) (b) 2. a. only prohibits excluding coverage for certain individuals relating to the insured vehicle. An exclusion barring coverage for a non-owned vehicle is not prohibited. Gulmire v. St. Paul Fire & Marine Insurance Co., 2004 WI App 18, 269 Wis. 2d 501, 674 N.W.2d 629, 03-1199.