South Carolina's homeowners questions test how state law limits insurers. The main topics are:

• Cancellation under 38-75-730.
• Nonrenewal of property insurance under Article 13 of chapter 38-75 (60 days' notice, with Director review).
• The renewal notice rules.
• The 7% flex band for homeowners rates.
• The valued policy law.
• The coastal Wind and Hail Underwriting Association.

The HO forms and coverages are in the national Homeowners guide.

Cancellation (38-75-730)

The first 120 days

• A new, non-renewal property policy may be canceled for any reason with 30 days' written notice, or 10 days for nonpayment (38-75-730(c)).

After 120 days, midterm cancellation is limited to:

• Nonpayment.
• Material misrepresentation.
• A substantial change in the risk.
• A substantial breach of contractual duties.
• Loss of reinsurance or solvency concerns. Canceling for loss of reinsurance requires notifying the Director at least 60 days ahead.

Climate-based changes

• A substantial change in risk based on changing climatic conditions must rest on South Carolina statistical data approved by the Director (38-75-730(d)).

Notice

• 10 days for nonpayment; 30 days for material misrepresentation.
• The notice must state the precise reason. Proof of mailing is sufficient proof of notice.
• If the reasons aren't stated, the insured may ask for them in writing within 90 business days. The insurer answers within 21 business days (38-75-1180).

Nonrenewal (Article 13, 38-75-1160)

• A notice of refusal to renew property insurance must give at least 60 days before it takes effect. Since 2021 there is no separate 90-day hurricane-season period.
• The notice tells the insured of the right to ask the Director to review, in writing, within 30 days.
• The Director may order reinstatement for noncompliance but doesn't make underwriting judgments.

Renewal terms (38-75-750)

• When renewing a one-year policy, the insurer gives the insured the renewal terms and premium at least 30 days before expiration, or 45 days if sent through the agent of record.
• If it doesn't, the insured may cancel the renewal within 30 days after receiving the terms. Earned premium is figured pro rata at the original premium.

Homeowners rates (38-73-220 to 38-73-330)

The 7% flex band

• Overall rate changes within 7% up or down for fire, allied lines and homeowners may take effect on a file-and-use basis, no less than 30 days after filing.
• Only two increases within the band are allowed in 12 months, and the second needs prior approval.

Other rate rules

• Consumer Advocate: an insurer with more than $10 million of South Carolina premium in the line that seeks an increase above the band sends a copy to the Consumer Advocate.
• Wind exclusions: a policy that excludes wind must get a discount matching the filed wind surcharge.
• Fire rates consider at least the most recent 5-year experience period.
• Rates must give due consideration to installed hazard-reducing systems.

The valued policy law (38-75-20, 38-75-30)

• Total fire loss: the insured recovers the full amount of insurance stated in the policy. That amount is fixed by insurer and insured when the policy is issued.
• Partial loss: the actual loss, up to the amount of insurance.
• Exceptions: the law doesn't apply to personal property (chattels). Owners of property used mainly for manufacturing may request a fully exempt policy.
• Multiple policies: when several policies exceed the agreed value, each pays its pro rata share.
• Replacement cost riders may pay the difference between actual value and what is actually spent to repair or replace.

Coastal wind and hail

• South Carolina has no FAIR plan.
• Coastal homeowners who can't get wind and hail coverage in the standard market apply to the South Carolina Wind and Hail Underwriting Association. See the South Carolina Other Personal Lines guide.

Common exam traps

• New policies: any reason in the first 120 days (30 days' notice, 10 for nonpayment). After that, only for listed reasons.
• Property nonrenewal: 60 days, with a 30-day window to ask for the Director's review.
• Renewal terms: 30 days ahead, or 45 through the agent.
• 7% band: file and use, 30 days after filing, no more than two increases a year.
• Valued policy law: a total fire loss to a building pays the full face amount. It doesn't apply to personal property.