5.2 Personal Auto Policy: Physical Damage, Collision & Uninsured Motorist

Physical Damage, Collision & Uninsured Motorist Coverage

Part C (Uninsured Motorists Coverage) and Part D (Coverage for Damage to Your Auto) represent crucial first-party and statutory protections within the Personal Auto Policy. South Carolina insurance law imposes mandatory rules regarding Uninsured Motorist (UM) limits, statutory property damage deductibles, Underinsured Motorist (UIM) offers, and multi-vehicle policy stacking rights.

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Part C: Uninsured Motorist (UM) Coverage in South Carolina

In South Carolina, Uninsured Motorist (UM) coverage is mandatory. Under S.C. Code § 38-77-150, no auto liability insurance policy may be issued or delivered unless it contains an endorsement providing UM coverage in limits at least equal to statutory minimum liability limits (25/50/25).

Statutory UM Property Damage Deductible

Unlike Part A Liability or Part C Bodily Injury, South Carolina statutory law requires a mandatory $200 deductible for property damage claims caused by an uninsured motorist under Part C. If an uninsured driver smashes an insured's parked car causing $3,000 in damage, the insurer pays $2,800 under statutory UM Property Damage ($3,000 damage minus $200 statutory deductible).

Defining an Uninsured Motor Vehicle

Under South Carolina law, an "uninsured motor vehicle" includes:

1. A vehicle for which there is no liability insurance policy or bond in effect at the time of the accident.
2. A vehicle carrying liability limits lower than the statutory minimum (25/50/25) required by South Carolina law.
3. An insured vehicle whose insurer denies coverage or becomes insolvent.
4. A hit-and-run vehicle whose operator or owner cannot be identified.

South Carolina Hit-and-Run Rule: For hit-and-run property damage or bodily injury claims where no physical contact occurred between the vehicles, S.C. Code § 38-77-170 requires that the accident be reported to police within a reasonable time AND that the injury/damage be corroborated by clear and convincing testimony of an eyewitness who is not a claimant.

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Underinsured Motorist (UIM) Coverage & SC Stacking Rules

Underinsured Motorist (UIM) Trigger

Unlike mandatory UM coverage, Underinsured Motorist (UIM) coverage is optional in South Carolina, but insurers must offer it in writing up to the insured's liability limits (S.C. Code § 38-77-160).

UIM triggers when an at-fault tortfeasor carries liability insurance that meets statutory requirements, but those liability limits are insufficient to pay the victim's total compensatory damages. UIM acts as excess coverage above the tortfeasor's liability payout.

Example UIM Calculation:

• Insured suffers $80,000 in verified bodily injury damages.
• At-fault driver carries statutory minimum liability limits of $25,000 BI per person.
• At-fault driver's insurer pays its full policy limit of $25,000.
• Insured's UIM policy pays the remaining $55,000 balance (provided insured holds at least $55,000 in UIM limits).

Policy Stacking Rules (S.C. Code § 38-77-160)

South Carolina permits stacking (combining coverage limits from multiple insured vehicles or policies) for UM and UIM coverage under specific statutory conditions:

• If an insured owns multiple vehicles under one or more policies, the insured can stack UM/UIM coverage for other owned vehicles up to the coverage limits of the vehicle involved in the accident.
• Non-owned drivers (occupants who are not named insureds or resident relatives) cannot stack policies; they are restricted to the coverage on the vehicle they were occupying.

Part D: Coverage for Damage to Your Auto

Part D provides first-party physical damage protection for "your covered auto" and non-owned autos. Physical damage coverage is divided into two distinct coverage sections: Collision and Other-Than-Collision (OTC / Comprehensive).

Collision vs. Other-Than-Collision (Comprehensive)

Special Peril Rules

• Bird or Animal Contact: Hitting a deer, dog, or bird is explicitly defined as an Other-Than-Collision loss. This prevents the loss from being rated as an at-fault collision accident.
• Glass Breakage: Glass breakage is covered under OTC. However, if glass breaks as a direct result of a collision, the insured may choose to submit the glass claim under Collision to avoid paying two separate deductibles.

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Transportation Expenses (Rental Reimbursement)

Part D automatically includes Transportation Expenses coverage when an insured carries Collision or OTC coverage on a covered vehicle:

• Monetary Limits: Pays up to $20 per day, subject to a maximum limit of $600 per loss ($20/600 limit).
• Waiting Periods:
  • 24 Hours: Standard waiting period for physical damage losses caused by Collision or OTC (e.g., collision damage, storm, fire).
  • 48 Hours: Mandatory waiting period for total theft of a covered auto before rental expense reimbursement commences.
• Coverage Window: Benefits end when the covered auto is repaired, replaced, or when the insurer tenders settlement for a total loss.

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Loss Settlement Options & Exclusions

Under Part D, the insurer's limit of liability for physical damage loss is the lesser of:

1. The Actual Cash Value (ACV) of the damaged or stolen property (Replacement Cost minus Depreciation); or
2. The amount necessary to repair or replace the property with other property of like kind and quality (LKQ).

Key Exclusions Under Part D

• Loss to sound reproduction equipment unless permanently installed in the opening of the dash/console by the auto manufacturer.
• Custom parts, equipment, or alterations (custom paint, special wheels, camper shells) exceeding $1,500 unless specifically endorsed.
• Radar detectors and laser jammer devices.
• Normal wear and tear, freezing, mechanical or electrical breakdown, and tire blowouts (unless caused by a covered collision or theft).