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The Wisconsin Automobile Insurance Plan (The Plan) was established on October 1, 1949 for the purpose of providing automobile insurance to risks who could not be placed in the voluntary market*.  The Plan is administered by a Governing Committee which consists of representatives from eight duly elected insurance companies licensed in the state of Wisconsin.  The Committee is empowered to appoint a Plan Manager and required staff, budget expenses, levy assessments against insurance companies, disburse funds and perform all duties essential to the proper administration of the Plan.   The Committee has also created Plan Rules & Rates which provide the public the benefit of price competition by encouraging maximum use of the normal insurance system.  Procedures are in force to distribute all applications in a fair and equitable manner.  The Plan is broken down into two main categories; one being the Private Passenger Personal Auto and the second being the Wisconsin Special Risk Distribution Plan (SRDP) for commercial risks.  The following is a brief explanation of each of the two categories.

Private Passenger Personal Auto

A private passenger automobile is a motor vehicle of the private passenger type, station wagon, jeep, motorcycle, motorized bicycle, scooter, recreational vehicle, motor home and other similar motorized vehicles.  The vehicles must be licensed for the road and cannot be used as a public or livery service nor rented to others.

The Plan offers bodily injury, property damage, uninsured motorist, underinsured motorist, medical payments and physical damage (comprehensive and collision).  These coverages are available with separate limits per person and per occurrence for bodily injury and property damage liability.

If you try several companies and cannot find coverage at any price, you may apply for insurance through the Plan. Generally, the Plan’s rates are higher than standard or high risk companies.  Any licensed agent can provide a premium quotation and submit applications to the Plan. The rating of policies is based on accidents, violations, location and vehicle use.  If at any time you secure coverage elsewhere, you may cancel your Plan policy with no penalty.

Private Passenger Limited Assignment Distribution (LAD) Program

The provisions of this subsection shall apply to all private passenger nonfleet risks submitted to the Plan on and after February 1, 2002. Companies which agree to participate will enter into a written agreement with the Wisconsin Automobile Insurance Plan.
  1. Aggregate premium writings for any designated LAD carrier(s), cannot exceed 50% of Wisconsin overall personal automobile insurance marketshare.  In the event there is more than one servicing LAD carrier, assignments will be made on an equitable basis.

  2. A servicing company must:

    1. have a service facility affording policy issuance and all other policyholder services, and

    2. have the ability to service insurance claims in every state, the District of Columbia, and Canada, and

    3. have been licensed to write automobile liability and physical damage insurance without restriction for a minimum period of five years in the state of Wisconsin, and

    4. have a statutory capital and surplus of not less than $2,000,000, and

    5. execute the Limited Assignment Distribution Agreement Among Companies, and comply with the provisions of that agreement.

  3. Subscriber companies which agree to assume additional assignments (servicing companies) will be paid in advance a prescribed fee established by the Committee on the basis of the additional quota accepted.

  4. Subscriber companies with a private passenger nonfleet quota whose share of Voluntary Private Passenger Nonfleet Liability Net Direct Written Car Years is less than 5% may elect to be excused from all private passenger nonfleet assignments excused companies).   An excused company shall pay a prescribed fee on the basis of its applicable private passenger nonfleet quota.  The Governing Committee has the option to consider a buy-out arrangement for a company writing 5% or greater of Wisconsin Voluntary Private Passenger Nonfleet Liability Net Direct Written Car Years. Such buy-out is subject to approval by the Governing Committee on a biennial basis.

  5. The executed LAD Agreement shall become effective at the beginning of the next quota quarter.  At the discretion of the Plan Manager, assignments to a subscriber company which has executed a LAD Agreement may be suspended prior to the beginning of the next quota quarter.

  6. The fee to be charged excused companies and paid to servicing companies (buy-out fee) shall be stated as a percentage of quota premium. Such fee shall be calculated in advance for each annual period in accordance with the following formula:

    Buy-Out Percentage =1.0 + Service Fee Percentage
    Statewide Estimated Loss And Expense Per Car
    (Statewide Indicated Average Premium)
    - Statewide Current Average Premium Per Car

    The service fee percentage factor in the above formula is set at 15% and will not be changed during the term of this LAD agreement.   The values of the other components of the formula will be adjusted annually on the basis of the most current experience available. The minimum buy-out fee is 30% or $500.00 which ever is greater and is paid annually. In no event shall the buy-out fee be less than 30%.   If the buy-out percentage formula results in a buy-out percentage of less than 30%, the buy-out percentage shall be set at 30% or $500.00 which ever is greater, subject to periodic review by the Governing Committee.  However, if the buy-out percentage formula results in a buy-out percentage of greater than 30%, the buy-out fee shall be set at the greater amount as determined by the formula.

  7. Each calendar year, AIPSO, on behalf of the Wisconsin Automobile Insurance Plan, shall calculate, collect, and distribute the estimated fees in accordance with the provisions of this Section.  Subsequent to each calendar year, AIPSO shall review and adjust each company’s market share and premium quota to reflect changes in premium assigned and in the voluntary data used to calculate each company’s quota. This final calculation of market share and premium quota shall not reflect any change in the components of the buy-out formula for that year.

  8. Servicing companies will provide full service for the entire quota of excused companies including that for claims and statistical reporting.

  9. Whenever there is termination of an excused company, a servicing company shall continue each policy in force under this rule for the remainder of its four-year assignment.  The Governing Committee may direct that quota adjustments be accelerated upon termination of a subscriber if it is deemed equitable.

  10. In the event a Plan subscriber who is an excused company in accordance with this Section is declared insolvent and owes buy-out fee monies to the servicing companies, the Plan shall pay the servicing companies for such outstanding balance.   The amount expended by the Plan for such payment shall be deemed a cost of administration of the Plan and shall be apportioned to subscriber companies as provided in the Appendix of the Plan Manual.   The Plan shall be subrogated in the liquidation proceedings to the rights of the servicing companies so paid.
Excused companies shall nonrenew all policies covering private passenger nonfleet automobiles assigned to it by the Plan.
The LAD Contract will renew annually unless the excused company submits a written notice of termination of the agreement to the Plan office no later than December 31st, prior to the year it elects to not participate in the Limited Assignment Distribution Procedure.
NOTE: Potential servicing carriers may petition the WAIP Governing Committee to replace the current Plan A with a proposed Plan B. The Plan B enables the carrier to negotiate the buy-out percentage or amount with the excused companies.

SRDP Commercial Insurance

A Commercial risk is defined as a truck, tractor, trailer, private passenger business use vehicle, public auto, miscellaneous type and hired and non-owned auto.   These commercial auto risks must be headquartered in Wisconsin to be eligible for coverage through the Plan.  Operating headquarters is defined as the head office, the place where the principal officers generally transact business, where the books are kept and from which orders emanate. When applying to the Plan, the application must encompass all your commercial automobile liability exposures. This means all owned and operated vehicles. The Plan does not provide coverage for only a portion of a commercial risk.  The applicant, under any name, cannot be indebted to the Plan or any carrier under the Plan with respect to current or prior coverage.   Coverage afforded under the Plan for the SRDP will be written on a combined single liability limit basis only. The Plan offers bodily injury, property damage, uninsured motorist, underinsured motorist and medical payments.  No physical damage coverage of any kind is available through the Plan on a commercial risk.  Any agent licensed in Wisconsin can submit an application to the Plan and may be able to quote you a rate.  Generally the rates in the Plan are higher than the voluntary market*, so the Plan should only be used when coverage at any price is not available.

If you feel that you are not being treated fairly once coverage is in force:

  • Contact your agent and/or assigned company and attempt to resolve the issue.

  • If you are still not satisfied, contact the Wisconsin Automobile Insurance Plan office. They will attempt to resolve the problem in a manner which is fair to all parties.

  • Finally, the Wisconsin Office of the Commissioner of Insurance (125 South Webster Street, Madison, WI 53703; phone: 608-266-3585 or 800-236-8517) will review and investigate any complaints brought to their attention.
(*) The voluntary market is defined as standard or high risk automobile insurance. This coverage is not provided by the Wisconsin Automobile Insurance Plan.
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