Auto Insurance Brochures
All insurance provides protection to consumers by covering certain risks and promising to pay for financial losses caused by these risks.
Auto insurance is one of the most used types of personal insurance. South Carolina requires that you purchase liability and uninsured motorist coverage to drive legally in the state. Auto insurance can be divided into two basic coverage areas: liability and property damage.
Auto liability insurance policies contain three major parts: liability insurance for bodily injury; liability insurance for property damage; and uninsured/underinsured motorists coverage.
Bodily injury liability insurance protects you against the claims of other people who are injured in an accident for which you were at fault. South Carolina requires you to carry a minimum of $25,000 per person for bodily injury and $50,000 for all persons injured in one accident. Claims for bodily injury may include medical expenses, lost wages, and pain and suffering.
Property damage liability insurance pays for any damage you cause to the property of others. This includes not only damages to other vehicles but also other property, such as walls, fences and equipment. The minimum limit in South Carolina is $25,000 for all property damage in one accident.
Uninsured motorists coverage protects the policy holder directly. This coverage pays if you are injured by a hit-and-run driver or a driver who does not have auto insurance.
Property damage coverage may include both collision coverage and comprehensive coverage.
Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car. This coverage is optional and not required by law. However, collision insurance may be required by your lending institution or lessor. In the case of an accident involving an older car, the cost of repairing the car can quickly exceed the worth of the car. In this case, insurers will “total” the car and pay you what the car was worth rather than fixing it.
Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, vandalism, floods, theft, falling objects and collisions with animals. Comprehensive coverage also will cover broken glass, such as windshield damage, and the deductible does not apply in this case. You are not required by law to carry comprehensive coverage.
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Your policy is divided into sections. It details types of coverage, rights and obligations under the policy and exclusions or limitations. Types of coverage may include liability, medical payments, uninsured/underinsured motorist, and coverage for damage to your auto.
An insurance policy is a legal contract. Your policy begins with a declarations page. This identifies the policy number and provides important information including the policy term, coverage limits, and information about the insured. It also contains a description of the vehicles covered under the policy.
If you received a loan to purchase your car and there is still an outstanding balance, the lender will be listed as "loss payee" on the declarations page.
Your policy contains a general insuring agreement consisting of a broad statement listing the perils and risks covered under the contract. The insuring agreement also identifies exclusions, which are specific events and circumstances the policy will not cover. It will contain definitions to help make the coverage clear and prevent any misunderstandings.
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Each company adopts its own rating system, although there are general guidelines that all companies follow.
The single greatest influence on the rating process is claim frequency. This does not mean how many times you specifically have made an insurance claim, although that will have an additional effect. Claim frequency measures how often an insured event occurs within a group relative to the number of policies contained in that group. Persons sharing characteristics with high claims groups will be charged more for insurance coverage.
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Specific Factors that Affect Your Rate
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Your driving record – drivers with previous violations or accidents are considered to be higher risk
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Your geographic territory – urban areas have more claims than rural areas
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Your gender and age – males have more accidents; certain age groups have more claims
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Your marital status – married people show lower rates of claims
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Prior insurance coverage – if you have ever had your insurance cancelled for non-payment of premiums
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Vehicle use – higher annual mileage results in higher exposure to risk
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Make and model of your vehicle – luxury and sports cars average a higher number of claims
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- Driving safely.
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Shop around and compare prices.
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Maintain a good driving record.
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Take the highest deductible you can afford and also take collision and comprehensive coverage.
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Before buying a vehicle, determine the cost of insuring it.
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On cars with a market value less than $1,000, consider carrying only liability coverage.
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Try to pay your premium well in advance of due date. No grace period applies to automobile insurance.
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Review your policy periodically and update coverage accordingly.
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Ask about discounts such as:
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Multiple cars on a policy
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Completion of driver education courses
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Good student drivers under age 25
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Mature driver (between 50 and 65 years of age)
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Airbags and other safety equipment
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Anti-theft devices
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Low mileage accident-free record
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Auto/home insurance with same company
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The first step is to select a financially strong insurer.
It is important to shop around to get the best price for the coverage you need. Talk to several representatives from a number of different companies. Tell them what your insurance needs are and ask what their company will charge to cover you.
Once you have narrowed down the companies you are considering, find out if the company is permitted to do business in South Carolina. If they are not, do not buy the insurance and contact the South Carolina Department of Insurance to let us know that the company is trying to do business in our state.
Check with rating agencies for a financial analysis, grade or rating of the insurance companies. These are conducted by several private companies and are only opinions. However, they can provide you with information about how private analysts view the financial stability of a particular insurance company. Ratings are available at most public libraries or on the Internet.
Check the company’s complaint record. You can contact our market regulation office at 803-737-6081 to provide you with the number of written complaints our office has received against an insurance company.
Remember, if it seems too good to be true, it probably is.
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How is Your Insurance Rate Determined?
Two factors determine what you pay for auto insurance. The first factor is underwriting and the second factor is rating. Insurance companies underwrite to assess the risk associated with an applicant, group the applicant with other similar risks and decide if the company will accept the application. Based on the results of the underwriting process, the rating assigns a price based on what the insurer believes it will cost to assume the financial responsibility for the applicant’s potential claim.
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Several Factors Will Affect Risk Rating
Your driving record, area in which you live, gender and age, marital status, prior insurance coverage, vehicle use and make and model of your vehicle are common factors that can affect the price you will pay for your auto insurance.
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Ask Your Agent About Discounts
Discounts are awarded because the insurance company sees you as a “better risk.” There are some discounts you should look for: multiple vehicles, driver education courses, good student, safety devices, anti-theft devices, low mileage, good driver/renewal, auto/home package and dividends.
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Tort System vs. No-Fault System
Each state must implement either a tort system or a no-fault system. South Carolina implements a tort system. The three basic coverages sold under the tort system are bodily injury liability insurance, property damage liability insurance and uninsured motorists coverage.
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Check Into Optional Coverage
The most commonly recognized coverages, in addition to the basic liability package, are collision and comprehensive coverages. Collision coverage pays for physical damage to your car as a result of your auto colliding with an object such as a tree or another car. This is relatively expensive coverage and is not required by law. Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft. This coverage will also cover broken glass and windshield damage. Comprehensive coverage is less expensive than collision, but is also optional. Other optional coverages include medical payments coverage, rental reimbursement coverage and towing and labor coverage.
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Shop Around Before You Buy
When shopping for auto insurance, premium quotations are a useful tool for comparison of different companies’ products. When asking for price quotations, it is crucial that you provide the same information to each agent or company. The agent will usually request the following information: description of your vehicle, its use, your driver’s license number, the number of drivers in your household, and the coverages and limits you want.
Check the newspaper and yellow pages of the telephone directory for companies and agents in your area. In addition, ask your neighbors, relatives and friends for recommendations on insurance companies and agents. In particular, ask them what kind of claim service they have received from the companies they recommend. Remember to shop around to get the best price and service.
Once you have selected the insurance coverages you need and an insurance agent or company, there are steps you can take to make certain you get your money’s worth. Before signing an application for any insurance coverage, verify that the company and the agent are licensed to do business in South Carolina. It is illegal for unlicensed insurers to sell insurance and, if you buy from an unlicensed insurer, you have no guarantee that the coverage you pay for will ever be honored.
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Read Your Policy Carefully
You should be aware that an auto insurance policy is a legal contract. It is written so your rights and responsibilities, as well as those of the insurance company, are clearly stated. When you purchase auto insurance, you will receive a policy. You should read that policy and make certain you understand its contents. If you have questions about your insurance policy, contact your insurance agent for clarification.
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Print and complete the Consumer Complaint form below and return to the Department of Insurance.
Consumer Complaint Form [pdf 26k]
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