South Carolina property and casualty basics questions draw on several Title 38 provisions:

• Code definitions: casualty insurance, certificates of insurance, coinsurance, inland marine, surety, the ceding insurer.
• The valued policy law for fire insurance.
• The general cancellation and nonrenewal article for property and casualty policies (38-75-710 et seq.).
• Commercial renewal notices.
• The P&C guaranty association.

General principles (contracts, indemnity, hazards, negligence, ACV vs. replacement cost) are in the national basics guides.

Code definitions (38-1-20)

• Casualty insurance protects against legal liability for harm to others.
• A certificate of insurance shows a third party that coverage exists.
• Coinsurance requires the insured to be their own insurer to the extent they underinsure.
• Inland marine covers movable property and goods in transit.
• A surety bond guarantees that an obligation will be performed.
• An insurer that transfers part of its risk to a reinsurer is the ceding insurer (38-9-170).

Fire insurance

• Every fire policy shows the location of the property and the county entitled to the premium allocation (38-75-10).

Valued policy law (38-75-20, 38-75-30)

• Total loss of a building by fire: the insured recovers the full amount of insurance.
• Partial loss: the actual loss, up to the limit.
• It doesn't apply to personal property.
• Manufacturing properties may be exempted on request.
• Policies exceeding the agreed value share pro rata.

Wind and Hail Association applications

• "Insurable interest" includes any lawful and substantial economic interest in the property (38-75-350).

Cancellation and nonrenewal (38-75-710 to 38-75-790)

Scope

• The article doesn't apply to automobile insurance, which has its own rules in chapter 38-77.

Cancellation

• First 120 days of a new policy: cancel for any reason with 30 days' notice, or 10 for nonpayment.
• After 120 days: only for listed reasons, such as nonpayment, material misrepresentation, a substantial change in the risk, a breach of contractual duties, or loss of reinsurance. Loss of reinsurance requires 60 days' notice to the Director.

Notices

• Notices state the precise reason. Proof of mailing is sufficient.
• Commercial property cancellation notices go to the insured and the agent of record.
• Workers' compensation cancellation is effective only if notice also goes to the Workers' Compensation Commission (38-75-730(e)).

Nonrenewal and renewal

• Nonrenewal of a one-year commercial property policy: at least 60 days' notice (38-75-740).
• Renewal terms: at least 30 days before expiration, or 45 days through the agent (38-75-750). If the terms are late, the insured may cancel within 30 days with earned premium pro rata at the original rate.
• Missing reasons: if a notice omits the reasons, the insured may ask within 90 business days, and the insurer answers within 21 business days.

Rates and forms

• Rates may not be excessive, inadequate or unfairly discriminatory (38-73-330). Property insurers file manual rates, rating plans and rules.
• A rate is the price of insurance per unit of exposure (38-1-20).
• Policy forms are filed and approved before use (38-61-20).

Guaranty association (chapter 38-31)

• The South Carolina Property and Casualty Insurance Guaranty Association pays the part of a covered claim over $250 and under $300,000.
• Workers' comp is paid in full.
• Unearned premium: only the amount over $100.
• Excluded: title, fidelity and surety, and first-party claims by insureds worth over $10 million.
• Surplus lines insurers aren't members.
• Claims filed more than 18 months after insolvency aren't covered.

Surplus lines (chapter 38-45)

• Nonadmitted insurers may write risks that licensed insurers have declined, through a licensed broker.
• The broker's premium tax is 6% (4% state + 2% municipal).

Common exam traps

• Valued policy law: a total fire loss to a building pays the face amount. It doesn't apply to contents.
• Non-auto cancellation: any reason in the first 120 days. After that, only listed reasons. 10 days for nonpayment, 30 for misrepresentation.
• Commercial nonrenewal: 60 days. Renewal terms 30 days ahead, or 45 through the agent.
• Workers' comp cancellation notice must also go to the Workers' Compensation Commission.
• Guaranty: over $250 to under $300,000; $10 million net-worth cutoff.