Auto insurance is one of the most used types of personal insurance. South Carolina requires that you purchase liability and uninsured motorist coverage to drive legally in the state. Auto insurance can be divided into two basic coverage areas: liability and property damage.
Auto liability insurance policies contain three major parts: liability insurance for bodily injury; liability insurance for property damage; and uninsured/underinsured motorists coverage.
Bodily injury liability insurance protects you against the claims of other people who are injured in an accident for which you were at fault. South Carolina requires you to carry a minimum of $25,000 per person for bodily injury and $50,000 for all persons injured in one accident. Claims for bodily injury may include medical expenses, lost wages, and pain and suffering.
Property damage liability insurance pays for any damage you cause to the property of others. This includes not only damages to other vehicles but also other property, such as walls, fences and equipment. The minimum limit in South Carolina is $25,000 for all property damage in one accident.
Uninsured motorists coverage protects the policy holder directly. This coverage pays if you are injured by a hit-and-run driver or a driver who does not have auto insurance.
Property damage coverage may include both collision coverage and comprehensive coverage.
Collision coverage pays for physical damage to your car as the result of your auto colliding with an object, such as a tree or another car. This coverage is optional and not required by law. However, collision insurance may be required by your lending institution or lessor. In the case of an accident involving an older car, the cost of repairing the car can quickly exceed the worth of the car. In this case, insurers will “total” the car and pay you what the car was worth rather than fixing it.
Comprehensive coverage pays for damage to your auto from almost all other causes, including fire, vandalism, floods, theft, falling objects and collisions with animals. Comprehensive coverage also will cover broken glass, such as windshield damage, and the deductible does not apply in this case. You are not required by law to carry comprehensive coverage.
Understanding Your Insurance Policy
- Your policy is divided into sections. It details types of coverage, rights and obligations under the policy and exclusions or limitations. Types of coverage may include liability, medical payments, uninsured/underinsured motorist, and coverage for damage to your auto.
- An insurance policy is a legal contract. Your policy begins with a declarations page. This identifies the policy number and provides important information including the policy term, coverage limits, and information about the insured. It also contains a description of the vehicles covered under the policy.
- If you received a loan to purchase your car and there is still an outstanding balance, the lender will be listed as "loss payee" on the declarations page.
- Your policy contains a general insuring agreement consisting of a broad statement listing the perils and risks covered under the contract. The insuring agreement also identifies exclusions, which are specific events and circumstances the policy will not cover. It will contain definitions to help make the coverage clear and prevent any misunderstandings.
How Auto Insurance Rates are Determined
Each company adopts its own rating system, although there are general guidelines that all companies follow.
The single greatest influence on the rating process is claim frequency. This does not mean how many times you specifically have made an insurance claim, although that will have an additional effect. Claim frequency measures how often an insured event occurs within a group relative to the number of policies contained in that group. Persons sharing characteristics with high claims groups will be charged more for insurance coverage.
Specific Factors that Affect Your Rate
- Your driving record – drivers with previous violations or accidents are considered to be higher risk
- Your geographic territory – urban areas have more claims than rural areas
- Your gender and age – males have more accidents; certain age groups have more claims
- Your marital status – married people show lower rates of claims
- Prior insurance coverage – if you have ever had your insurance cancelled for non-payment of premiums
- Vehicle use – higher annual mileage results in higher exposure to risk
- Make and model of your vehicle – luxury and sports cars average a higher number of claims
- Driving safely.
- Shop around and compare prices.
- Maintain a good driving record.
- Take the highest deductible you can afford and also take collision and comprehensive coverage.
- Before buying a vehicle, determine the cost of insuring it.
- On cars with a market value less than $1,000, consider carrying only liability coverage.
- Try to pay your premium well in advance of due date. No grace period applies to automobile insurance.
- Review your policy periodically and update coverage accordingly.
- Ask about discounts such as:
- Multiple cars on a policy
- Completion of driver education courses
- Good student drivers under age 25
- Mature driver (between 50 and 65 years of age)
- Airbags and other safety equipment
- Anti-theft devices
- Low mileage accident-free record
- Auto/home insurance with same company