“Brunson and Progressive contracted for $25,000 of UIM insurance, and Brunson paid a premium for that amount of coverage. However, Wis. Stat. sec. 632.32(4m)(d), in effect at the time Brunson purchased his policy, required UIM coverage of at least $50,000. By operation of law, the higher level of coverage is ‘read in,’ even though it was not reflected in the premium paid. At this level of coverage, the policy is not illusory, and the remedy in Meyer is not applicable.
“At either $25,000 or $50,000, Brunson’s UIM coverage limits were less than Ward’s $100,000 liability policy limits. Progressive’s policy defined an underinsured motor vehicle as a vehicle insured for less than the UIM coverage limits in Progressive’s policy. Since Ward’s liability limits exceeded Brunson’s UIM coverage limits, Ward was not an underinsured motorist under the policy. Therefore, UIM benefits were not recoverable, and Progressive was properly dismissed from this action.”
Affirmed in part, Reversed in part.
DISSENTING OPINION: Bradley, J. “Public policy requires that we not allow insurers to accept the premium for a policy that is illusory as written and then fall back on the ‘conformance to law’ clause of their policy when the deceptive nature of the policy they have drafted comes to light. Doing so transforms the insurance code into a safety net for insurers who issue illegal policies. The majority’s decision provides no consequences for insurers that draft policies in advantageous contravention of the statutes.”
For Appellant: Lynne A. Layber, Milwaukee
For Respondent: Rick E. Hills, Michelle M. Stoeck, Brookfield