Ownership, Maintenance, and Use of Automobile

South Carolina law mandates that all automobiles be covered by automobile liability insurance policies. The law is found at S.C. Code Ann. § 38-77-140. This statute provides, in part, as follows:

No automobile insurance policy may be issued or delivered in this Stateto the owner of a motor vehicle or may be issued or delivered by an insurer licensed in this State upon any motor vehicle then principally garaged or principally used in this State, unless it contains a provision insuring the persons defined as insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of these motor vehicles ....

The key provision of this liability insurance statute relates to the words, "arising out of the ownership, maintenance, or use" of the car. Thus, South Carolina automobile insurance policies must provide coverage when liability arises due to these activities.

Sometimes the scope of potential liability coverage arises in situations most people would not expect coverage. For example, we have recovered liability payments when the vehicle owner negligently left a part under some leaves in a parking lot. The part caused a passer-by to trip and fall. Since the fall arose out of the maintenance of the vehicle, the automobile liability policy applied and the person was able to obtain a recovery from the insurance company.

Other times, such as when a vehicle is used as a platform to commit an assault on a person, like a drive-by, gangland shooting, our law holds that such injuries do not "arise from the use" of the vehicle. Rather, the vehicle's involvement is just fortuitous and use of the vehicle bears no relationship to the intentional act. Then, the liability insurance policy may not apply to cover the wrong-doer.

Insurance Company Claims Adjusting Duties

South Carolina has statutes which require automobile insurance companies to treat people with claims in a fair and reasonable manner. The statute that relates to how adjusters must handle claims is S.C. Code Ann. § 38-59-20. Under Section 38-59-20, the following acts are some of those defined by statute as improper claims practices:

• Knowingly misrepresenting to insureds or third-party claimants pertinent facts or policy provisions relating to coverages at issue or providing deceptive or misleading information with respect to coverages.
• Not attempting in good faith to effect prompt, fair, and equitable settlement of claims, including third-party liability claims, submitted to it in which liability has become reasonably clear.
• Offering to settle claims, including third-party liability claims, for an amount less than the amount otherwise reasonably due or payable based upon the possibility or probability that the policyholder or claimant would be required to incur attorneys' fees to recover the amount reasonably due or payable.
• Invoking or threatening to invoke policy defenses or to rescind the policy as of its inception, not in good faith and with a reasonable expectation of prevailing with respect to the policy defense or attempted rescission, but for the primary purpose of discouraging or reducing a claim, including a third-party liability claim.
• Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies, including third-party claims arising under liability insurance policies.
• Any other practice which constitutes an unreasonable delay in paying or an unreasonable failure to pay or settle in full claims, including third-party liability claims, arising under coverages provided by its policies.

Insurance Companies owe a fiduciary and statutory duty to their insureds to fairly adjust their claims. The process of making a claim to an insurance company should not be an adversarial process. However, because insurance companies are profit-driven organizations, it often seems to be difficult for an insured to make a fair and full recovery .