Progressive total-loss settlements in South Carolina: how to negotiate a fair offer

South Carolina regulates first-party automobile total losses through four layered authorities: the Motor Vehicle Physical Damage Appraisers Act at S.C. Code Ann. §§ 38-49-10 et seq., implemented by S.C. Code Regs. 69-16 (mandatory MV-damage appraiser license issued by the SC Department of Insurance after written examination), the Unfair Claim Settlement Practices statute at S.C. Code Ann. § 38-59-20, the attorney's-fee statute at S.C. Code Ann. § 38-59-40 (fees when an insurer refuses without reasonable cause or in bad faith to pay a claim), and the common-law bad-faith tort recognized in Nichols v. State Farm Mutual Automobile Insurance Co., 279 S.C. 336 (1983) and refined in Tadlock Painting Co. v. Maryland Casualty Co., 322 S.C. 498 (1996). South Carolina's MV-damage appraiser license requirement gates the appraisal-clause appraiser role; SecondAppraisal Inc acts through Jonathon A. Thomas, who holds South Carolina motor vehicle damage appraiser license 16488407 and may serve as the policyholder's appraiser of record. S.C. Code Ann. §§ 38-49-10 et seq. — Motor Vehicle Physical Damage Appraisers Act. No person may act as an appraiser for motor vehicle physical damage claims on behalf of an insurer, or a firm or corporation engaged in the adjustment or appraisal of motor vehicle claims, without a license from the Director of Insurance (§ 38-49-20). The implementing regulation at S.C. Code Regs. 69-16 requires a written examination before a license issues and sets the general methods by which appraisers conduct their business. A violation of the chapter is a misdemeanor punishable by a fine of up to $500, imprisonment of up to one year, or both (§ 38-49-40). Note that MV-damage appraisers are licensed under Chapter 49, NOT under the Chapter 47 general Adjusters Act (S.C. Code Ann. § 38-47-10 et seq.), which governs the separate adjuster role. S.C. Code Ann. § 38-59-20 — Unfair Claim Settlement Practices. The statute makes the following improper claim practices when committed without just cause and performed with such frequency as to indicate a general business practice, including: knowingly misrepresenting to insureds or third-party claimants pertinent facts or policy provisions relating to coverages at issue; failing to acknowledge with reasonable promptness pertinent communications about claims; failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims; not attempting in good faith to effect prompt, fair, and equitable settlement of claims in which liability has become reasonably clear; and compelling policyholders or claimants to institute suits by offering substantially less than the amounts ultimately recovered. § 38-59-20 itself does not create a private right of action; enforcement runs through the SC Department of Insurance. S.C. Code Ann. § 38-59-40 — Attorney's Fees on an Unreasonable Refusal to Pay. When an insurer refuses to pay a claim within ninety days after the insured's demand and the trial judge finds the refusal was without reasonable cause or in bad faith, the insurer is liable for reasonable attorney's fees, not to exceed one-third of the judgment, in addition to the amount recovered. The fee award runs alongside the Nichols/Tadlock common-law tort, which carries the substantive bad-faith damages. Nichols v. State Farm Mutual Automobile Insurance Co., 279 S.C. 336 (1983) — Common-Law Bad-Faith Tort. The South Carolina Supreme Court recognized a cause of action against an insurer for bad faith refusal to pay first-party benefits due under an insurance contract. Tadlock Painting Co. v. Maryland Casualty Co., 322 S.C. 498 (1996), held that an insured may sue for breach of the implied covenant of good faith and fair dealing, which extends not just to the payment of a claim but to the manner in which it is processed. The elements are a binding insurance contract, a refusal to pay benefits due, resulting from the insurer's bad faith or unreasonable action in breach of the implied covenant, and resulting damage (Cock-N-Bull Steak House, Inc. v. Generali Ins. Co., 321 S.C. 1 (1996)); generally, if there is a reasonable ground for contesting a claim, there is no bad faith in the denial of it. Punitive damages must be proved by clear and convincing evidence (S.C. Code Ann. § 15-33-135). S.C. Code Ann. § 56-19-480 — Salvage Title Threshold. For that section, a "salvage vehicle" and a "vehicle declared to be a total loss" are the same thing: a vehicle damaged so that the cost of repair, including parts and reasonable market labor charges, equals or exceeds 75% of its fair market value (measured immediately before the loss when an insurer is involved). The section does not apply to vehicles worth $2,000 or less or to antique vehicles. South Carolina requires a Motor Vehicle Physical Damage Appraiser license to act as the policyholder's named appraiser under the policy's appraisal clause. SecondAppraisal Inc acts through Jonathon A. Thomas, who holds South Carolina motor vehicle damage appraiser license 16488407 and may serve as the named appraiser when the policyholder invokes the appraisal clause; our market research and valuation analysis support that independent opinion.