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According to the Insurance Research Council (IRC), one in eight U.S. drivers are uninsured. In many states, additional insurance is mandatory in order to protect motorists (and insurance companies) from the uninsured and underinsured. So what does this mean for South Carolina in particular?
Uninsured and Uninsured Drivers in South Carolina
According to a 2021 survey by the IRC, one in eight drivers on the road in the United States are without insurance. In 2019, the reported rate was 12%. The report also stated, to no one’s surprise, that uninsured drivers make car insurance more expensive for everyone else — motorists paid an average of $78 per insured vehicle to account for at-fault drivers who are uninsured. The total cost nationwide is over $33 billion in uninsured or underinsured car insurance coverage.
Because there are a great many factors at play, the average percentage of uninsured drivers varies by state. In New Jersey, the uninsured driver rate is a mere 3.1%, while in Mississippi it’s 29.4%. South Carolina is right in the middle with 10.9%.
While not as dire as uninsured drivers, there are also drivers who take out only the minimum coverage, which may not be sufficient to meet all property damage and medical costs in case of an accident.
As with basically every other state, basic liability insurance is mandatory in South Carolina. State law requires insurance coverage to a minimum of $25,000 per person for bodily injury and $50,000 for all persons injured in a single accident. For property damage liability, South Carolina law requires $25,000 for all property damage caused in a single accident.
South Carolina state laws also require uninsured drivers’ coverage equal to the basic liability minimums (25/50/25), with an average $200 deductible. While insurance companies in South Carolina are required to offer motorists underinsured driver coverage, it is not mandatory to purchase it.
How Does This Impact Drivers?
Uninsured drivers make things worse for everyone. When an uninsured or underinsured driver gets in an at-fault accident, the insurance company must cover bodily injury and property damage expenses for both parties. This creates an extra financial burden for insurance companies, which is then passed on to the policyholders in the form of higher premiums.
As anyone who’s had to file an auto insurance claim probably knows, being in an accident is likely to bring your rates up. According to information collected by Kristine Lee at The Zebra, the average yearly premium for car insurance in SC is $1,572 — just a little above the national average. Getting in a not-at-fault accident, however, will raise your premiums to an average of $2,155, a raise of $130 per year. So even if you’re not at fault for an accident, you’ll be paying more in car insurance — and the presence of uninsured drivers on the road could drive those premiums up even more, through no fault of your own. Soon, it may be difficult to find cheap South Carolina car insurance at all.
Penalties for Driving Without Insurance in South Carolina
South Carolina’s laws for dealing with uninsured drivers can be strict. In South Carolina, motorists are required to either purchase car insurance, or pay a $550 “uninsured motorist” fee every year. If they fail to do either of those things, then they may be found guilty of a misdemeanor — which could lead to fines, jail time, and the surrender of car registration and license plates. Also, the state will require filing of an SR-22 form, which will likely lead to a hike in your insurance rates, or even lead to your insurance being dropped or canceled. After more than one incident, your chances of getting insured, or at least finding cheap car insurance in SC, drop dramatically.
Further, driving with a suspended license — a common punishment for uninsured drivers — not only carries legal penalties, but will also result in a huge increase to your yearly auto insurance premiums: 64% on the average, potentially bringing your yearly premium to $3,322, a total of $1,298 a year more than the average.
South Carolina’s Insurance Stacking Rule
With uninsured and underinsured drivers being such a problem in South Carolina, insurance companies have introduced some rules to help protect responsible drivers should they get in an accident with an uninsured driver.
It’s called “stacking insurance,” and here’s how it works: claimants are allowed to “stack” policies, essentially adding coverage from other policyholders in the same household, even if those policies cover vehicles that weren’t involved in the accident. Insurance stacking is possible because of South Carolina state law, which stipulated that insurance should follow the policyholder, not a specific vehicle. So if your household has multiple policies, they can be combined to provide more coverage if needed.