South Carolina Code of Regulations
Chapter 69 - DEPARTMENT OF INSURANCE
69-56 - Hurricane, Named Storm or Wind/Hail Deductible.

Universal Citation: SC Code Regs 69-56

69-56. Hurricane, Named Storm or Wind/Hail Deductible.

Under S. C. Code Ann. Section 38-73-70 (1976), the Department of Insurance may make reasonable regulations for the enforcement of Chapter 73 entitled ''Property, Casualty, Inland Marine and Surety Rates and Rate-making Organizations.''

A. Purpose: The purpose of this regulation is to clarify the process for insurers, including surplus lines insurers, to inform policyholders who purchase personal and commercial property policies of the presence of a hurricane, named storm or wind/hail deductible within their policies. The Department recognizes that an insurer may choose to have separate endorsements for each of hurricane, named storm or wind/hail deductibles or may choose to combine them into one endorsement.

B. Definitions:

(1) Named Storm Deductible is a separate deductible triggered by a weather-related event that has been named, designated or identified by the U.S. National Weather Service or the National Hurricane Center. It only includes a hurricane, tropical storm or tropical depression. Any storm or weather-related event given a name by any other person or entity does not qualify as a named storm, for purposes of a separate deductible. Any winter storm or weather event named or identified by the news media cannot be relied upon to trigger a named storm deductible.

(2) Wind/Hail Deductible is a separate deductible applied to a personal or commercial property insurance policy that applies to losses resulting from the perils of wind or hail, regardless of how named or applied and regardless of whether the deductible is calculated as a percentage of policy limits or a specified dollar amount.

C. No insurer may offer a new property policy to or renew an existing policy of an insured that includes a hurricane, named storm or wind/hail deductible unless the insurer:

(1) includes an example which illustrates how the deductible functions for a policy valued at $100,000 and this illustration will include a clear explanation of the event which will trigger the deductible; and

(2) includes on the face of any policy that contains a separate hurricane, named storm or wind/hail deductible the following statement: THIS POLICY CONTAINS A SEPARATE DEDUCTIBLE FOR HURRICANE, NAMED STORM OR WIND/HAIL LOSSES, WHICH MAY RESULT IN HIGH OUT-OF-POCKET EXPENSES TO YOU. THE ENCLOSED EXAMPLE ILLUSTRATES HOW THE DEDUCTIBLE MIGHT AFFECT YOU. This identical statement shall also appear on the declarations page. The language may be added to the policy by an amendatory endorsement.

D. Renewal Changes: No insurer may change a current property policy at renewal by implementing a hurricane, named storm, or wind/hail deductible or increasing the size of the hurricane, named storm or wind/hail deductible unless:

(1) the insurer includes an example which illustrates how the deductible functions for a policy valued at $100,000 and this illustration must include a clear explanation of the event which will trigger the deductible; and

(2) the named insured signs or initials a disclosure that acknowledges that the named insured has read the example.

E. Regulatory Action. Any violation of this regulation may trigger penalties as set forth in S.C. Code Section 38-2-10.

F. Implementation. This regulation becomes effective upon publication in the State Register and applies to any property insurance policies issued or renewed 120 days following such publication. This regulation supersedes and replaces former regulation 69-56 originally issued in 2000.

HISTORY: Added by State Register Volume 24, Issue No. 6, eff June 23, 2000. Amended by SCSR 44-6 Doc. No. 4878, eff June 26, 2020.

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