South Carolina automobile insurance law can often be confusing. It is best to hire a knowledgeable and experienced personal injury and accident attorney to determine if you have a potential claim. However, in this post, we will attempt to explain the basics of South Carolina insurance law as to liability insurance, underinsured motorist coverage, and uninsured motorist coverage. Please note that such an analysis may not apply in your particular case.
When you are involved in an accident, there are three possible routes to insurance coverage depending on the extent of your injuries: (1) liability insurance; (2) first-party insurance; and (3) un-involved vehicle underinsured motorist and uninsured motorist coverage.
South Carolina requires that insurance policies governed by its laws have a minimum amount of liability coverage. The minimum amount is $25,000 per person and $50,000 per occurrence (“$25,000/$50,000”). See S.C. Code Ann. § 38-77-140. This means that the insurer will pay each victim up to $25,000, but no more than $50,000 for that accident. Of course, individuals seeking an insurance policy may opt for more than the minimum amount.
The liability insurance would be the first place an injured party would seek reimbursement for his or her injuries. Liability insurance is insurance that provides payment to an injured party when an insured under the policy is legally liable. The at-fault driver cannot collect liability insurance because this policy only pays for liability and you cannot be liable to yourself for “self-inflicted” injuries. In order for an injured party to collect from the policy, it must be determined whether the at-fault driver is an insured on that specific vehicle’s policy. This does not necessarily mean that the at-fault driver must be the named-insured on the policy. They could be a resident relative or spouse and be covered under the policy. They could also have permission to drive the vehicle which would also invoke coverage if the at-fault driver acted within the scope of that permission. See S.C. Code Ann. § 38-77-140(7) (“‘Insured’ means the named insured and, while resident of the same household, the spouse of any named insured and relative of either, while in a motor vehicle or others, and any person who uses with the consent, express of implied, of the named insured the motor vehicle to which the policy applies . . . .”)
An injured party would next look to first-party insurance on the vehicle that was involved in the accident if the liability coverage was not enough to cover your injuries or if the at-fault party was uninsured. In this case, you would be seeking underinsured motorist coverage (“UIM”) or uninsured motorist coverage (“UM”). UIM applies when your injuries exceed the amount of the at-fault driver’s policy limits. See S.C. Code Ann. § 38-77-140(15). UM applies either when the at-fault driver is uninsured and has no insurance policy, when the at-fault driver is unknown, or when the at-fault driver’s coverage is less than the minimum requirement for liability insurance (i.e., $25,000 per person/$50,000 per occurrence). See S.C. Code Ann. § 38-77-140(14). A person may have less than the minimum requirement if they are from another state that requires less coverage than South Carolina law. UM coverage is mandatory in South Carolina and an insured is entitled to at least the $25,000/$50,000 in coverage. See Burgess v. Nationwide Mut. Ins. Co., 373 S.C. 37, 40-41, 644 S.E.2d 40, 42 (2007). UIM; however, is not mandatory in South Carolina. Id. Your insurer must offer you the coverage, but you have no obligation to accept it. Id.
First-party insurance is different from liability insurance. It is an auto policy in which the injured claimant is an insured. There are two categories of insureds: Class I insureds and Class II insureds. See Concrete Services, Inc. v. U.S. Fidelity & Guar. Co., 331 S.C. 506, 509, 498 S.E.2d 865, 866 (1998). Class I insureds include the named-insured, the named-insured’s spouse, and any resident relatives of the named-insured. Class II insureds are permissive users and guests. Id. Class I and II insureds are entitled to collect UM or UIM (if available) on the insurance policy. Id. In other words, you do not necessarily have to be paying directly on the policy to receive coverage. In fact, you may not even know the insurance policy exists and may still be considered an insured if you fall within the two categories.
Next, you would seek coverage on any un-involved vehicles that you are a Class I insured on if the previous two options were not enough to cover your injuries. UIM and UM are personal and portable. Nationwide Mut. Ins. Co. v. Rhoden, 398 S.C. 393, 399, 728 S.E.2d 477, 480 (2012). In other words, UM and UIM is for the benefit of the insured and follows the insured, not the vehicle. It makes no difference whether you were injured in the vehicle that has the UIM or UM coverage. Depending on your status as an insured in the involved vehicle, you may be able to stack or reach back to your UM or UIM policy on an un-involved vehicle or vehicles.
An insured may stack multiple policies when they are considered a Class I on the vehicle involved in the accident (i.e., the vehicle you were driving or riding in at the time). However, you can only get as much from each policy as you collected from the involved-vehicle. For example, if the involved-vehicle policy provided $25,000 in UIM, then any stacked policies cannot provide more than $25,000.
If you are not a Class I insured on the vehicle involved in the accident, then you have the option to reach back to one other policy to which you are a Class I insured. You may only reach back to one policy, unlike stacking. However, you are not limited by the involved vehicle’s policy coverage. For example, if the involved-vehicle policy provided $25,000 in UIM and you have a vehicle with $100,000 in UIM in which you are a Class I insured, you may be able to collect the full limits depending on the extent of your injuries. This means that the best alternative is obviously to go after the policy that has the most coverage. It is not clear whether UM has the same limitations in South Carolina law. Therefore, it is arguable that you could potentially reach back to as many UM policies as you have available.
These are the most common ways in seeking automobile insurance coverage after an automobile accident. Of course, most insurance policies include an exhaustion policy in which you are not entitled to UIM coverage until you have exhausted the liability coverage. Because this process can be very complicated, it is best to speak to a knowledgeable car accident attorney to determine your options and potential for coverage. Our injury attorneys at The Mace Firm will ensure that we do everything possible to get reimbursement for your injuries. Our personal injury lawyer, Russell W. Mace III, has over 15 years of experience in personal injury litigation and is a member of the Million Dollar Advocates Forum and Multi-Million Dollar Advocates Forum. Mr. Mace aggressively represents his clients and is always concerned for their best interests.
If you would like to speak with a personal injury attorney, please contact our office at (843) 829-2900 or toll free at 1-800-94-TRIAL for a free consultation. You may also contact us online.