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H 4039

Automobile Insurance

2025-2026 Regular Session Introduced by Brandon Guffey and 2 co-sponsors

The bill requires auto policies to allow arbitration for disputed loss amounts, with a 90-day filing window and insurer reimbursement of insured’s costs if the award exceeds the in

Referred to Committee on Labor, Commerce and Industry
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Bill Summary · H 4039

Summary — H 4039 (Automobile Insurance) — South Carolina (draft dated 02/19/2025)

Note: The materials you provided also include unrelated text for a Massachusetts House bill (House No. 4039) about universal meals at senior centers. This summary below addresses the South Carolina automobile insurance bill text (the “Automobile Insurance” bill listed as H 4039).

Main purpose and intent

The bill requires South Carolina automobile insurance policies to include a provision allowing parties to seek a resolution (arbitration) when insurer and insured disagree about the amount of loss on a property-damage liability claim. It also (1) sets a deadline to initiate that resolution process and (2) creates a narrow penalty requiring insurers to reimburse certain insured expenses when an arbitrator’s award exceeds the insurer’s proposed loss amount.

Key provisions

  • New mandatory policy provision (adds S.C. Code § 38-77-5)

    • All new or renewed automobile insurance policies in the state must include a provision that complies with this article.
    • Requesting a resolution under the article does not waive any policy rights of either insurer or insured.

  • Deadline to seek arbitration/resolution (adds S.C. Code § 38-77-15)

    • If insurer and insured disagree on the amount of loss under a property-damage liability claim, either party may request appointment of an arbitrator(s) as prescribed in the referenced statute (Section 38-77-10) no later than 90 days after the date a proof of loss is filed with the insurer.

  • Allocation of costs and limited reimbursement (adds S.C. Code § 38-77-780)

    • Generally, each party bears its own costs and fees for establishing its loss amount.
    • However, if the arbitrator’s decision sets the loss at more than $1 greater than the insurer’s proposed loss statement, the insurer must reimburse the insured’s out‑of‑pocket expenses, attorneys’ fees, and costs associated with establishing the amount of loss.

  • Effective date

    • The act takes effect upon approval by the Governor.

Who is affected

  • Insured vehicle owners and claimants with property-damage liability claims against insured drivers.
  • Automobile insurance companies issuing policies in South Carolina (must include the new policy provision and comply with arbitration and reimbursement rules).
  • Attorneys and adjusters handling property-damage valuation disputes (potentially greater use of arbitration).

Potential impacts and considerations

  • Encourages use of an arbitration/resolution mechanism for valuation disputes and imposes a 90‑day window to initiate it after proof of loss.
  • The $1 threshold for triggering insurer reimbursement is very low; practically, this creates a mechanism that could require insurers to reimburse insureds’ out-of-pocket costs and fees whenever the arbitrator finds any amount modestly higher than the insurer’s offer—potentially incentivizing insurers to make more liberal initial offers or to avoid disputes.
  • Could increase insurer administrative and claims costs (and thus could affect premiums over time).
  • The bill references arbitration appointment procedures in another statutory section (Section 38-77-10); implementation details (e.g., arbitration process, selection, fees) depend on those existing provisions.
  • Does not set caps or limits on reimbursable fees, nor define “out‑of‑pocket expenses” in detail—this may require interpretation or later rulemaking.

Procedural status (as provided)

  • Introduced: April 22, 2025
  • Referred to: Committee on Labor, Commerce and Industry

If you want, I can:
- Draft a brief comparison to current South Carolina law on automobile property-damage dispute resolution, or
- Summarize the separate Massachusetts House No. 4039 (senior meals) bill included in the materials.

Compiled from official sources — confirm details with the bill’s official record.

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