New Year Brings Higher Insurance Rates, Minimums for S.C. Drivers

The new year will force about a third of South Carolina’s drivers to dig deeper into their wallets to pay for auto insurance.

A little-debated change in state law requires drivers to buy minimum liability coverage of $25,000 for a single injury in a wreck, $50,000 for multiple injuries and $25,000 for property damage. That’s a sharp increase from the current limits of $15,000, $30,000 and $10,000.

Those will be among the nation’s highest minimum coverage amounts. Alaska, Maine, Minnesota and North Carolina all have higher bodily injury amounts. Nine other states have the same minimums South Carolina is adopting, including Georgia, Mississippi and Oklahoma, according to the South Carolina Insurance News Service.

The higher coverage limits, tougher laws on school bullies and limits on residential property tax increases are the most notable new laws that take effect with the new year.

But unlike other major law changes the Legislature passed this year, the auto insurance law hits the books without much public scrutiny. It was attached to a bill as an amendment by state Sen. Gerald Malloy, D-Hartsville, without public hearings.

Gov. Mark Sanford vetoed the bill, but the Legislature overrode the veto.

“There was no credible evidence that it needed to be done,” Sanford spokesman Joel Sawyer said. It “appears to be a case of the president of the Trial Lawyers Association sneaking in a provision that would benefit people he represents in a professional capacity rather than people he represents in the Senate.”

Allison Love, executive director of the South Carolina Insurance News Service, said the change will affect premiums for more than a million drivers. For those drivers buying policies below the new threshold amounts, their costs are expected to increase by as much as $118 a year, Love said. The amount of increase will depend on a consumer’s driving record and where they’re buying insurance, she said.

Some expect that to prompt the more people to drive without insurance, but “there’s no way for us to know that right now,” Love said. Department of Motor Vehicles statistics show nearly a third of drivers involved in wrecks were uninsured in 2005, Love said.

The Legislature also has demanded that schools crack down on bullies requiring districts to adopt policies prohibiting harassment, intimidation or bullying.

“We were getting too many complaints from parents that their children … were being bullied and intimidated,” state Rep. Robert Walker, R-Landrum, said. They were “fearing to go to school because of the situations that were taking place.”

The new law is an attempt to curb violence while protecting teachers and others who work in schools from student threats and intimidation.

It had gotten to the point that there is “an unbelievable thought that students would feel that they could attempt to bully the teacher” or school support staff, Sheila Gallagher, president of the South Carolina Education Association, said.

Legislators also addressed concerns about rising residential property tax rates by making it harder for counties to raise taxes. It is part of a law change that will raise the state’s sales tax in June in an attempt to lower owner-occupied property taxes.

“It’ll stop these four, five and 600 percent increases in property taxes,” said Emerson Read, whose NoHomeTax.org group has pressured legislators to eliminate property taxes. Under the new law, counties will have to limit increases to a combination of population growth and inflation.

Read said some counties have tried to get around the approaching limits by rushing to raise taxes in the past year. But he expects legislators will force them to roll back those increases to 2005 levels.

Still, the limits have raised concerns.

For instance, Standard and Poor’s cited property tax breaks as a source of concern about the state’s finances as it reviewed South Carolina’s credit rating in August. S&P said the breaks leave the state depending on sales tax collections to cover school operating costs, noting that sales tax collections could fall in an economic downturn. That could force the state to make up the difference from other funds.