South Carolina auto questions test the auto insurance chapter of Title 38 (chapter 38-77), the Motor Vehicle Financial Responsibility Act (Title 56, chapters 9 and 10), and the Associated Auto Insurers Plan. South Carolina is an at-fault state: the negligent driver is responsible for damage to others. It is known for mandatory uninsured motorist coverage at the minimum limits plus optional UIM. The policy form itself (Parts A-F) is in the national Personal Auto Policy guide.

Required coverage

Minimum liability limits (38-77-140)

• The policy must cover use of the vehicle in the United States or Canada.
• A minimum-limits driver who injures three people pays at most $50,000 in total for bodily injury.

Exclusions the policy may have (38-77-220)

• It need not cover workers' comp liability, injury to the insured's employee in non-domestic work, or damage to property the insured owns or has in their care.

Payments and releases

• Paying a property damage claim isn't an admission of liability on other claims (38-77-230).
• A general release taken when paying first-party benefits, such as med pay, is void unless the insurer gives an approved disclosure and at least 3 days to reconsider (38-77-260).

Named driver exclusion (38-77-340)

• A named insured may exclude a specific household driver from liability coverage by signed endorsement.
• This is allowed only if the named insured declares that the excluded person's license was turned in to the DMV, or that other liability insurance was obtained for that person.

Physical damage (38-77-280)

• Collision and comprehensive are offered at the insurer's election to those who ask for them.
• A physical damage deductible doesn't apply to auto safety glass.

Uninsured and underinsured motorist

Mandatory UM (38-77-150)

• Every auto policy must include UM at limits at least equal to 25/50/25.
• The property damage portion may exclude the first $200 of the loss.

Optional coverage (38-77-160)

• Insurers must offer additional UM up to the insured's liability limits.
• They must also offer UIM up to the liability limits.
• UIM pays when the insured's damages exceed the at-fault driver's liability limits.
• A UIM policy may not require the insurer's consent to settle with the at-fault driver.
• When an insured is hurt in one of their insured vehicles, excess UM/UIM is limited to the coverage on that vehicle.
• Optional excess UM and UIM benefits aren't subject to subrogation.

The offer form (38-77-350)

• When the named insured signs the director-approved offer form, the selection is conclusively presumed informed.
• If the insured doesn't return the form within 30 days, the insurer adds UM and UIM at limits equal to the liability limits.
• No new offer is needed at renewal.

Unknown drivers (38-77-170 to 38-77-200)

• The accident must be reported to police within a reasonable time.
• The insured must also show one of the following:
  • Physical contact with the unknown vehicle.
  • A signed witness affidavit.
  • Under the 2024 rewrite, a recording showing that the unknown vehicle caused the damage.
• Suit may be filed against "John Doe."
• Mandatory UM may not require arbitration.
• The insurer that pays mandatory UM is subrogated to the insured's rights.

Cancellation and nonrenewal (38-77-120 to 38-77-124)

New policies

• A new policy may be canceled without cause during the first 90 days (38-77-121).

After the new-business period

• Midterm cancellation is allowed only for nonpayment or suspension of a covered driver's license (38-77-123(B)).
• A cancellation or nonrenewal notice must give at least 15 days before the effective date.
• The notice must mention other coverage available through the agent, another insurer or the Associated Auto Insurers Plan.

Review

• The insured may ask the Director to review within 15 days of receiving the notice.
• The policy stays in force during the review, except when cancellation is for nonpayment.

Nonrenewal limits

• An insurer may not nonrenew because of:
  • The insured's age.
  • Accidents or violations more than 36 months old.
  • Comprehensive claims alone (it may change or drop comprehensive with 30 days' notice).
  • One UM claim with contact with the uninsured car.
• An insurer needn't renew if the insured becomes a nonresident.

Underwriting limits

• No refusal solely because of the age of the vehicle (38-77-124).
• Territorial plans can't limit writing to areas smaller than a county.
• Rates may not consider the applicant's income level.
• A pattern of unfair discrimination can bring fines up to $200,000 (38-77-122).

Records and renewal changes

• Records of cancellations and nonrenewals are kept 3 years.
• A renewal with reduced coverage requires a separate "Notice of Reduction in Coverage" at least 15 days before renewal (38-77-120(b)).

Financial responsibility (Title 56)

Registration and proof

• The DMV registers a vehicle only after seeing evidence of insurance (56-10-10).
• Proof is kept in the vehicle and may be shown on a phone in an insurer-issued format (56-10-225).
• If a vehicle becomes uninsured, the owner must insure it immediately or surrender the plate and registration (56-10-240).

Lapse and uninsured driving

• Lapse fine: $5 per day, capped at $200 per vehicle for a first offense (56-10-245).
• Driving uninsured: a first offense is a misdemeanor, with a $100-$200 fine or 30 days (56-10-520).

After an accident

• After an accident with injury, death or at least $400 of property damage, the verification-of-insurance form goes back to the DMV within 15 days (56-9-350).

Proof of financial responsibility (56-9-540)

• Proof may be a certificate of insurance, a bond, or a deposit of money or securities.
• Certified coverage can't be canceled until 10 days after notice is filed with the DMV.
• A binder issued while a policy is pending satisfies the requirements (56-9-20).
• A policy issued to meet the requirement runs at least 6 months. In its first 60 days it can be canceled only for limited reasons, such as a bounced premium check (56-10-280).

Assigned risk: Associated Auto Insurers Plan (38-77-810 to 38-77-850)

• Drivers who can't get coverage in the voluntary market apply to the Associated Auto Insurers Plan.
• Insurers may meet their obligation through an approved Assigned Risk Pool.
• Certified producers may bind coverage immediately by electronic means.
• Information filed about an assigned risk is confidential.

Common exam traps

• 25/50/25, and UM is mandatory at those limits. UIM is optional but must be offered.
• Unreturned offer form: after 30 days, UM and UIM are added at the liability limits.
• First 90 days: cancel for any reason. After that, only for nonpayment or license suspension, with 15 days' notice.
• No deductible on safety glass.
• Named driver exclusions are allowed with the required declaration.
• Auto is the one line where agents may rebate part of their commission (38-43-200(E)).