Homeowners insurance is part of protecting the financial investment in a home. In South Carolina, state laws and regulations govern these insurance policies, influencing who must have insurance, what a policy covers, and how claims are handled. Understanding these state-specific rules is important for homeowners.
Homeowners Insurance Requirements in South Carolina
South Carolina state law does not mandate that every homeowner purchase insurance. However, anyone financing a home with a mortgage will be required by their lender to have a homeowners insurance policy to protect the lender’s financial interest. Without proof of insurance, a home loan is unlikely to be approved.
The South Carolina Department of Insurance is the state agency responsible for overseeing the insurance industry. This department ensures that companies operate fairly and that consumer rights are protected under the state’s insurance laws, found in Title 38 of the South Carolina Code of Laws.
Understanding Standard Homeowners Insurance Coverage
A standard South Carolina homeowners insurance policy, like an HO-3, includes several types of coverage to protect against different losses.
- Dwelling coverage, which applies to the physical structure of the house.
- Other structures coverage for things like detached garages, sheds, or fences.
- Personal property coverage, which protects the contents of the home like furniture and electronics.
- Loss of use coverage, which provides for temporary living expenses if the home becomes uninhabitable.
- Liability protection, which covers accidental injuries or property damage to others on the homeowner’s property.
- Medical payments coverage for guests who are accidentally hurt on the property.
Unique South Carolina Insurance Provisions
South Carolina’s coastal geography requires specific insurance provisions. The primary example is the South Carolina Wind and Hail Underwriting Association (SCWHUA), or “Wind Pool.”1Justia Law. South Carolina Code Section 38-75-330 – South Carolina Wind and Hail Underwriting Association Created; Members The SCWHUA is a last-resort insurer providing wind and hail coverage to coastal residents who cannot obtain it in the standard market. To be eligible, the property must be in a designated coastal territory and have been denied coverage by private insurers.
Insurers in coastal areas also use hurricane deductibles, which are separate from the standard policy deductible.2Cornell Law School Legal Information Institute. S.C. Code Regs. § 69-56 – Hurricane, Named Storm or Wind/Hail Deductible These are calculated as a percentage of the home’s insured value, such as 1% to 5%, instead of a flat dollar amount. For a home insured for $250,000 with a 2% hurricane deductible, the homeowner is responsible for the first $5,000 of damages from a named storm.
Homeowners should also understand that standard policies do not cover flood damage. Flood insurance must be purchased as a separate policy, often through the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA). Given the state’s susceptibility to flooding, this coverage is a consideration for homeowners statewide, not just those in high-risk flood zones.
Policyholder Rights for Cancellations and Non-Renewals
South Carolina law provides protections for homeowners regarding the termination of their insurance policies. An insurer cannot cancel a policy that has been in effect for more than 120 days except for specific reasons. These reasons include nonpayment of premium, material misrepresentation by the policyholder, or a substantial change in the property’s risk, as detailed in S.C. Code Ann. § 38-75-730.3Justia Law. South Carolina Code Section 38-75-730 – Restrictions on Cancellation of Policies and Renewals
For a cancellation due to nonpayment, the insurer must provide at least 10 days’ written notice, while a 30-day notice is required for all other permitted reasons. If an insurer decides not to renew a policy, S.C. Code Ann. § 38-75-740 requires them to give the homeowner at least 60 days’ advance written notice.4Justia Law. South Carolina Code Section 38-75-740 – Restrictions on Nonrenewal of Policies The notice must state the reason for the non-renewal, giving the homeowner time to find other coverage.
Filing an Insurance Claim in South Carolina
After sustaining property damage, a homeowner should promptly notify their insurance company to begin the claims process. The homeowner must also take reasonable steps to prevent further damage. Documenting the loss with photos, videos, and an inventory of damaged items before making repairs is a fundamental step.
Once the claim is filed, the insurer will assign an adjuster to investigate. Under S.C. Code Ann. § 38-59-10, the insurer must provide necessary proof of loss forms within 20 days of receiving notice.5Justia Law. South Carolina Code Section 38-59-10 – Proof of Loss Forms Required to be Furnished S.C. Code Ann. § 38-59-20 also requires insurers to acknowledge communications promptly and implement reasonable standards for the prompt investigation and settlement of claims.6Justia Law. South Carolina Code Section 38-59-20 – Improper Claim Practices While there is not a strict deadline for payment, insurers are expected to act in good faith and avoid unreasonable delays.