Underinsured Motorist Coverage in South Carolina

The Court of Appeals of South Carolina recently came out with a decision that will affect some of our clients. Nationwide Mut. Ins. Co. v. Rhoden, No. 4659. The decision concerns underinsured motorist coverage (“UIM”), which is additional coverage that you can buy that pays out when you are injured in a car accident but the financial costs of your injuries exceed the amount of the at-fault driver’s liability insurance coverage. Normally, underinsured motorist coverage is available not only to the person who buys it, but also to relatives of the insured who live with the insured (“resident relatives”). For example, if a mother buys a UIM policy, that policy normally may be used by the mother’s husband and her children who still live at home if they are involved in an accident, even if the accident happens in a car not owned or insured by the mother. This decision by the Court of Appeals allows insurance companies to deny underinsured motorist coverage to “resident relatives” of a policyholder when the resident relative decided not to purchase UIM coverage on their own car, the same car that was later involved in the accident.

In this case, Ashley was the owner and driver of a vehicle, with her mother Kelly and sister Emerlynn as passengers, when they were the involved in an accident. Ashley insured the vehicle with Nationwide but didn’t get UIM coverage under her policy. However, Kelly had two of her vehicles insured with Nationwide and both had UIM coverage. All three women were resident relatives. The trial court ruled that all three women were entitled to UIM coverage under Kelly’s policy since they were either named insureds (Kelly) or resident relatives (Ashley and Emerlynn). Nationwide appealed. The Court of Appeals ruled that Ashley could not recover UIM coverage from her mother’s UIM policy, holding that it is permissible for an insurance company to limit the portability of UIM coverage for resident relatives when then the resident relative owns the vehicle in the accident. The court ruled that Kelly and Emerlynn could recover UIM coverage from Kelly’s UIM policy, holding that an insurance policy may not limit the portability of the UIM for passengers because they did not have the opportunity to buy UIM coverage on the vehicle in the accident.

The two courts to hear this case, the trial court and the Court of Appeals, have decided this case differently. On appeal, the Supreme Court of South Carolina may agree with the trial court, with the court of appeals, or it may decline to hear the case altogether. But this is a new and unexplored area of the law of automobile insurance in South Carolina . We enjoy keeping up with these developments so that we can use them to benefit our clients. If you, a friend, or family member is injured in a South Carolina car accident, don’t let the insurance company tell you your rights. Please call us at George Sink, P.A. Injury Lawyers at 1-800-849-SINK (7465) for a free consultation.

The information relayed in this blog is for educational purposes only and is not legal advice. The cases referenced and explained by the blog’s author(s) are for informational purposes only and are not intended to imply that certain, or similar, results may be achieved in each client’s case.