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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.

Detailed Answer

After a collision, insurers may delay or deny claims to limit payouts. South Carolina law classifies many of these tactics as unfair insurance practices. You can take several steps to challenge improper delays or denials and protect your rights.

Understanding Delay and Denial Tactics

Insurers commonly use these delay or denial strategies:

• Requesting redundant or unnecessary documentation.
• Prolonged “investigation” without updates.
• Issuing lowball offers or denials without clear explanation.
• Missing statutory or policy deadlines for response.

Legal Standards in South Carolina

South Carolina’s Unfair Trade Practices Act prohibits insurers from engaging in unfair claims settlement tactics. Key provisions include:

• SC Code Ann. § 38-3-110 – Defines unfair claims settlement practices, such as failure to acknowledge claims promptly or unreasonably delaying investigations or payments.
• SC Code Ann. § 38-3-150 – Allows insureds to file civil actions for damages caused by unfair insurance practices, including bad faith.

Steps to Challenge Delay or Denial

1. Review Your Policy: Identify deadlines for proof of loss, notice requirements, and any appraisal or arbitration clauses.
2. Request a Written Explanation: Under § 38-3-110, the insurer must provide reasons for any denial and cite the relevant policy provisions.
3. Send a Formal Demand Letter: Detail the facts, reference policy terms, and set a clear deadline (commonly 30 days) to resolve the claim.
4. File a Complaint with the SC Department of Insurance: Submit a complaint at doi.sc.gov. The Department investigates unfair practices and can impose penalties.
5. Invoke Appraisal or Arbitration: If your policy includes an appraisal clause, demand appraisal to establish the value of your loss. For arbitration provisions, initiate that process to obtain a binding determination.
6. Pursue a Lawsuit: If administrative steps fail, file a civil action for breach of contract and bad faith under § 38-3-150. You may recover policy benefits, interest, attorney’s fees, and, in some cases, punitive damages.

Helpful Hints

• Document every communication: note dates, names, and summaries of calls or emails.
• Keep copies of all correspondence, estimates, repair invoices, and medical bills.
• Follow up phone calls with a confirming email or letter to create a clear record.
• Act promptly. South Carolina law limits the time to file complaints and lawsuits.
• Consider consulting an attorney early if the insurer’s response is inadequate.
• Use certified mail or another trackable method for all formal notices.