S 203 Session 109 (1991-1992)
S 0203 General Bill, By Courson, Giese and M.T. Rose
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Article 4
to Chapter 77 of Title 38 so as to require insurance carriers to provide
optional no-fault insurance coverages, to provide definitions, to provide for
additional optional no-fault liability coverages in excess of the minimum
no-fault policy requirements, to provide for the payment of no-fault benefits,
and to provide for a no-fault insured's liability under certain conditions.
09/17/90 Senate Prefiled
09/17/90 Senate Referred to Committee on Banking and Insurance
01/08/91 Senate Introduced and read first time SJ-78
01/08/91 Senate Referred to Committee on Banking and Insurance SJ-7
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING ARTICLE 4 TO CHAPTER 77 OF TITLE 38 SO AS TO
REQUIRE INSURANCE CARRIERS TO PROVIDE OPTIONAL
NO-FAULT INSURANCE COVERAGES, TO PROVIDE
DEFINITIONS, TO PROVIDE FOR ADDITIONAL OPTIONAL
NO-FAULT LIABILITY COVERAGES IN EXCESS OF THE
MINIMUM NO-FAULT POLICY REQUIREMENTS, TO PROVIDE
FOR THE PAYMENT OF NO-FAULT BENEFITS, AND TO
PROVIDE FOR A NO-FAULT INSURED'S LIABILITY UNDER
CERTAIN CONDITIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 77, Title 38 of the 1976 Code is amended by
adding:
" Article 4
No-Fault Insurance
Section 38-77-390. Notwithstanding any other provision of law, an
automobile insurance carrier operating in this State must offer, at the
time of the option of the insured, an alternative no-fault automobile
insurance option. Each insurer must also provide optional excess
no-fault automobile insurance coverages which may be purchased by the
insured. This optional excess coverage, if purchased by the insured,
shall begin upon the exhaustion of the minimum no-fault benefits which
are required by this article .
Section 38-77-400. As used in this article :
(1) 'Accidental harm' means bodily injury, death, sickness, or
disease caused by a motor vehicle accident to a person.
(2) 'No-fault benefits' with respect to accidental harm means:
(a) All appropriate and reasonable expenses necessarily incurred
for medical, hospital, surgical, professional nursing, dental, optometric,
ambulance, or prosthetic services, products, and accommodations
furnished;
(b) All appropriate and reasonable expenses necessarily
incurred for psychiatric, physical, and occupational therapy and
rehabilitation; and
(c) Monthly earnings loss measured by an amount equal to the
lesser of:
(i) Nine hundred dollars a month; or
(ii) The monthly earnings for the period during which the
accidental harm results in the inability to engage in available and
appropriate gainful activity.
(3) 'No-fault policy' means a minimum liability coverage of:
(a) fifteen thousand dollars for bodily
injury to any person; and
(b) ten thousand dollars for property damage.
If the insured has excess optional no-fault insurance coverage, the
limits of the policy shall apply.
(4) 'No-fault insured' means:
(a) A person identified by name as an insured in a no-fault policy
complying with this article ; and
(b) While residing in the same household with a named
insured, the following persons not identified by name as an insured in
any other contract of no-fault policy complying with this article :
(i) a spouse or other relative of a named insured; and
(ii) a minor in the custody of a named insured or of a relative
residing in the same household with a named insured. A person
resides in the same household if the person usually makes the person's
home in the same family unit, even though the person temporarily lives
elsewhere.
(5) 'Without regard to fault' means irrespective of fault as a cause
of accidental harm, and without application of the principle of liability
based on negligence.
Section 38-77-410. (A) If the accident causing accidental harm
occurs in this State, a person insured under this article , and the person's
survivors, suffering loss from accidental harm arising out of the
operation, maintenance, or use of a motor vehicle has a right to no-fault
benefits.
(B) If the accident causing accidental harm occurs outside this
State, the following persons and their survivors suffering loss from
accidental harm arising out of the operation, maintenance, or use of a
motor vehicle shall have a right to no-fault benefits:
(1) No-fault insureds; and
(2) The driver and other occupants of an insured vehicle, other
than a vehicle which is used in the course of the business of transporting
persons or property and which is one of five or more vehicles under
common ownership.
(C) The total no-fault benefits payable per person or on the
person's death to the person's survivor or survivors on account of
accidental harm sustained by the person in a motor vehicle accident must
be determined by the no-fault policy.
Section 38-77-430. A no-fault insurer must provide no-fault benefits
for accidental harm as follows:
(1) Except as otherwise provided in Section 38-77-450:
(a) In the case of injury arising out of a motor vehicle accident to
a person, including the owner, operator, occupant, or user of the insured
motor vehicle, or a pedestrian (including a bicyclist); or
(b) In the case of death arising out of a motor vehicle accident
of a person, including the owner, operator, occupant, or user of the
insured motor vehicle, or a pedestrian (including a bicyclist), who
sustains accidental harm as the result of the operation, maintenance, or
use of the vehicle, the insurer must pay, without regard to fault, to the
legal representative of the person, for the benefit of the surviving spouse
and a dependent, as defined in Section 152 of the Internal Revenue Code
of 1954, of a person, an amount equal to the no-fault benefits payable to
the spouse and dependent as a result of the death of the person, subject,
however, to the provisions of Section 38-77-400(1); or
(c) Payment of no-fault benefits must be paid as the benefits
accrue, except in the case of death, payment of the benefits may, at the
option of the beneficiary, be paid immediately in a lump sum payment.
(2) Payment of no-fault benefits must be paid within thirty days
after the insurer has received reasonable proof of the fact and amount of
benefits accrued, and the demand for payment. If the insurer elects to
deny a claim for benefits in whole or in part, the insurer must within
thirty days notify the claimant in writing of the denial and the reasons
for the denial. The denial notice must be prepared and mailed by the
insurer in triplicate copies and be in a format approved by the
Commissioner. If the insurer cannot pay or denies the claim for benefits
because additional information or loss documentation is needed, the
insurer must, within the thirty days, forward the claimant an itemized list
of all the required documents.
(3) Amounts of benefits which are unpaid thirty days after the
insurer has received reasonable proof of the fact and amount of benefits
accrued, and the demand for payment after the expiration of the thirty
days, must bear interest at the rate of one and one-half percent per
month.
(4) No-fault benefits may not be applied in any manner as
attorney's fees in the case of injury or death for which the benefits are
paid. The insurer must pay, in addition to the no-fault benefits due, all
attorney's fees and the costs of settlement or suit, necessary to effect the
payment of any or all no-fault benefits found due under the contract.
Section 38-77-450. (A) A claim for no-fault benefits may not be
made against an insurer for the accidental harm of a person unless the
person is involved in the motor vehicle accident.
(B) A payment of no-fault benefits may not be made to the occupants
of a motor vehicle other than the insured motor vehicle, or to the
operator or user of a motor vehicle engaging in a crime classified as a
felony as defined in Section 16-1-10 which causes any loss.
(C) The no-fault insurance is applicable only to accidental harm and
property damage to which this article applies and is the insurance on the
vehicle occupied by the injured person at the time of the accident.
Section 38-77-460. A person insured under existing tort based
liability insurance, who is
involved in an accident with a no-fault insured, must file a claim under
his uninsured motorist coverage unless the claim meets the requirements
of Section 38-77-470.
Section 38-77-470. (A) Tort liability of the owner, operator, or user
of an insured motor vehicle when involved in a motor vehicle accident
with a no-fault insured, or the operator or user of an uninsured motor
vehicle who operates or uses such vehicle without reason to believe it to
be an uninsured motor vehicle, with respect to accidental harm arising
from motor vehicle accidents occurring in this State, is abolished, except
as to the following persons or their personal representatives, or legal
guardians, and in the following circumstances:
(1) Death occurs to the person in a motor vehicle accident; or
injury occurs to the person which consists, in whole or in part, in a
significant permanent loss of use of a part or function of the body; or
injury occurs to such person which consists of a permanent and serious
disfigurement which results in subjection of the injured person to mental
or emotional suffering;
(2) Injury occurs to the person in a motor vehicle accident in
which the benefits paid or accrued exceed the medical-rehabilitative
limit in Section 38-77-500(B) for expenses provided in Section
38-77-400(2)(a) and (b); provided that the expenses paid must be
presumed to be reasonable and necessary in establishing the
medical-rehabilitative limit; or
(3) Injury occurs to the person in an accident and as a result
of the injury, the aggregate limit of the minimum no-fault benefits
outlined in Section 38-77-400(3) payable to the person are exhausted.
This section applies whether or not the injured person is entitled to
receive no-fault benefits. The person against whom the presumption
under this section is directed has the burden of proof to rebut the
presumption.
(B) A claim may not be made for benefits under the uninsured
motorist coverage by an injured person against an insurer who has paid
or is liable to pay no-fault benefits to the injured person unless the claim
meets the requirements of the foregoing subsection (A)(1), (2) or (3).
(C) A provision of this section may not be construed to exonerate,
or in any manner to limit, the liability of any person in the business of
manufacturing, retailing, repairing, servicing, or otherwise maintaining
motor vehicles, arising from a defect in a motor vehicle caused, or not
corrected, by an act or omission in the manufacturing, retailing,
repairing, servicing, or other maintenance of a vehicle in the course of
the person's business.
(D) A provision of this section may not be construed to exonerate,
or in any manner to limit the criminal or civil liability, including special
and general damages, of any person in the maintenance, operation, or
use of any motor vehicle.
(E) A provision of this article shall be construed to abolish tort
liability from motor vehicle accidents with respect to damages which
exceed the minimum no-fault policy coverage in Section 38-77-400(3).
Section 38-77-500. (A) A no-fault policy is an insurance policy
covering a motor vehicle and must provide, in addition to the coverage
specified in Section 38-77-430, insurance coverage to pay on behalf of
the owner or any operator of the insured motor vehicle using the motor
vehicle with the express or implied permission of the named insured,
sums which the owner may legally be obligated to pay for injury, death,
or damage to the property of others, except property owned by, being
transported by, or in charge of the insured, which arise out of the
ownership, operation, maintenance, or use of the motor vehicle.
(B) In addition to the no-fault coverages described in Section
38-77-470, an insurer issuing a no-fault policy must make available to
the insured optional excess insurance under the following conditions:
(1) Optional excess liability coverages that exceed the minimum
no-fault coverage limits as may be considered necessary by the
Department of Insurance and authorized by regulations, except that these
coverages must be consistent with this chapter;
(2) At the option of the insured, an insurer must offer provisions
covering loss resulting from damage to the insured's motor vehicle with
such deductibles, including two hundred fifty dollars, as the
Commissioner by regulation must provide; and
(3) At appropriately reduced premium rates, no-fault insurers
must offer deductibles, applicable only to claims of no-fault insureds
and, in case of death of a no-fault insured, of the insured's survivors, in
the amounts of one hundred dollars, three hundred dollars and five
hundred dollars, from all no-fault benefits otherwise payable, except that
if two or more no-fault insureds to whom the deductible is applicable
under the contract of insurance are injured in the same accident, the
aggregate amount of the deductible applicable to all of the no-fault
insureds must not exceed the specified deductible, which amount where
necessary must be allocated equally among them."
SECTION 2. This act takes effect one hundred eighty days after the
approval by the Governor.
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