In SC, Stare Decisis Wins the Day

Last Wednesday, the South Carolina Supreme Court agreed with me that an insurance company cannot contractually eliminate a resident relative’s ability to stack underinsurance motorist coverage from other companies.

Chief Justice Toal authored the opinion in Carter v. The Standard Fire Ins.  Co., 406 S.C. 609, 753 S.E.2d 515 (2013).

Chief Justice Toal of the South Carolina Supreme Court
Chief Justice Toal of the SC Supreme Court

Standard Fire argued that it could exclude UIM coverage if the car in the accident is not listed in its policy because UIM coverage is voluntary. I countered that the exclusion violated S.C. Code § 38-77-160, the statute on stacking; the statute’s purpose; and the statute’s traditional construction.

Stare decisis was key. For my statutory construction, I was able to cite unbroken case law that began in 1973; Standard Fire relied on a single case from 2007. The Court distinguished that case and agreed that its other decades-long precedent unequivocally require that insurance companies allow resident relatives to stack up to certain amounts.

It also helped that this statutory construction is good public policy.  As I also pointed out,  Standard Fire could and likely did consider these South Carolina stacking cases when the Company set its premiums. Excluding stacking, after setting premiums based on it, is a quid with no quo.

The Court agreed:

Rather, to allow the exclusion here would be to permit the insurance company, in the better position to assess risk because it can account for a resident relative in setting premiums, to hinder competition and increase insurance premiums by limiting coverage for a Class I insured to a single policy, meaning the Class I insured could only purchase excess UIM coverage on all his vehicles on the insurer’s terms. We find this result undesirable, and more importantly, one not intended by the legislature under the clear language of 38-77-160.

Here is the case.

Anyone else faced similar stacking issues? Please leave a reply.





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