What is Auto Insurance?
All forms of insurance provide 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 law requires that you purchase liability and uninsured motorist coverage to drive legally in the state. Auto insurance is divided into two basic coverages: liability and physical damage.
Auto liability insurance policies contain three major parts under South Carolina Tort law: 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 not only includes damages to other vehicles but also other property, such as buildings, 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 policyholder directly. This coverage pays if you are injured and/or your property is damaged by a hit-and-run driver or an uninsured driver. South Carolina law requires you to carry uninsured motorists coverage equal to the minimum amounts of liability coverage (25/50/25). There is typically a $200 deductible.
Underinsured motorists coverage is similar to uninsured motorist coverage, but pays for your injuries or property damage if the at-fault driver does not have enough insurance to cover your damages or medical bills. Auto insurers are required to offer you underinsured motorists coverage in South Carolina, but you are not required to purchase it.
Physical damage is auto insurance coverage that insures against damage to the insured's own vehicle. The most common types are collision coverage and comprehensive coverage. These two coverages are optional to purchase.
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. In the case of an accident involving an older car or any vehicle sustaining extensive damage, the cost of repairing the car can quickly exceed a threshold of the car's actual cash value. In this case, insurers will “total” the car and pay you the actual cash value of the car, minus the deductible, rather than repairing it. As indicated by South Carolina Department of Motor Vehicles Law 56-19-480(G), this threshold is 75% of the vehicle's actual cash value (ACV).
Comprehensive coverage pays for damage to your auto from most other causes, including fire, vandalism, flooding, theft, falling objects, and collision with animals. Comprehensive coverage will also cover broken glass, such as damage to a windshield. In South Carolina, auto insurers cannot impose a deductible for safety glass repairs or replacements.
While not required by law, comprehensive and collision coverage may be required by your lender.
Contact Our Office of Consumer Services with QuestionsThe SCDOI's Office of Consumer Services can help answer your questions about auto or other types of insurance.
File an Insurance Complaint
If you're having a specific problem with an insurance company, broker, agent, or adjuster, file a complaint with our Office of Consumer Services at doi.sc.gov/complaint.
Report Suspected Insurance Fraud
If you suspect someone has committed any type of insurance fraud, call the South Carolina Insurance Fraud Hotline toll-free at 1-888-953-7283 or complete the Insurance Fraud Complaint Form online. You don’t have to reveal your identity. For more information about insurance fraud, go to doi.sc.gov/fraud.
How Auto Insurance Rates are Determined
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. In general, persons sharing characteristics with high claims groups will be charged more for insurance coverage.
Specific Factors that May Affect Your Rate
Although not an exhaustive list, some of the factors that can impact how much you pay in auto insurance premiums includ the following:
- Your driving record
- Your geographic territory
- Your gender and age
- Your marital status
- Prior insurance coverage
- Vehicle use
- Make and model of your vehicle
- Your prior insurance claims
Tips for Lowering Your Auto Insurance Premiums
Take the highest deductible you can afford. If you choose to buy comprehensive and collision coverage, be aware that collision pays for physical damage to your car as a result of collision with another object, while comprehensive pays for damage from most other causes, including fire, vandalism, flood and severe weather. Also, always remember to drive safely, doing your best to maintain a good driving record.
- Shop around and compare prices.
- Before buying a vehicle, determine the cost of insuring it.
- For cars with a market value less than $1,000, consider carrying only liability coverage.
- Try to pay your premium well in advance of the due date. No grace period applies to automobile insurance.
- Review your policy periodically and update coverage accordingly.
- Ask about discounts such as:
- Multiple cars on a policy
- Completion of driver education courses
- Good student drivers under age 25
- Airbags and other safety equipment
- Anti-theft devices
- Low mileage
- Accident-free record
- Auto / home insurance with same company
Things You Should Know About Buying Auto Insurance
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.
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:
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.
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.
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.
The SCDOI developed a tool that allows consumers to compare price estimates from insurance companies that sell auto and homeowners insurance in South Carolina. You will be asked to answer several questions about yourself, where you live, your desired level of coverage, and your car or home. Answering these questions to the best of your ability should result in a better price estimate.
Where to Shop
Check online, 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.
You can find a list of insurance companies and their market share in South Carolina on our Market Assistance page.
For Your Protection
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.
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.