Liability insurance claims drive up costs for South Carolina drivers
COLUMBIA, SC (WIS) -
Liability insurance claims in South Carolina are legal, but cost drivers more in insurance premiums and opens the state up to fraud.
Using South Carolina's law, a Midlands father settled a wrongful death lawsuit against his eldest son for a crash that resulted in his other son's death after they filed a liability claim against their son, Cameron Stringfellow. That crash happened last May when the car Cameron was driving was traveling too fast for conditions and struck a parked car and several trees. His brother, Corey, died and another teen in the car was hurt.
As for Cameron's felony DUI charges from the May 24, 2013, crash, he has not gone to court yet. Court records show that his insurance company settled the wrongful death claim filed by his father on behalf of his brother's estate. We contacted the family and attorney for questions, but received no comment.
So here's how the insurance claim works in the Stringfellow case. Corey's father can legally file the wrongful death claim, even against his own insurance policy on behalf of Corey's estate. While a case like this may seem strange, it's legal.
South Carolina is one of 28 states that places no restrictions on lawsuits when it comes to auto liability. While it can be a help to some families, in other cases, it's made it easier for insurance fraud and for driving up insurance rates even more.
"It's not only perfectly legal, it's more common that you would see liability claims against family members, not just in circumstances where there is a death, but also just cases of bodily injury," said Russ Dubisky, executive director for the South Carolina Insurance News Service. "There is no immunity for family members in liability in South Carolina automobile insurance. Regardless of who is injured, if they are injured by no fault of their own, they will be able to collect to cover those damages that were incurred under a liability insurance policy."
Our investigation uncovered the way the law reads in South Carolina could make you the victim of higher rates. The South Carolina Insurance News Service says state law drives up claim activity. That, in turn, drives up liability costs for insurance.
In South Carolina, on average, drivers pay $461 in liability costs for auto insurance. That's the 19th highest cost nationwide and $100 more than states to the north are paying.
"South Carolina has made the decision that if somebody is injured to no fault of their own that the best course of recovery for them is to be able to collect under an insurance policy," Dubisky said.
Our investigation found these liability claims can open the state up to fraud when people take advantage of the system.
"We do see some organized rings among family members for insurance fraud and fraud is not a victimless crime," Dubisky said.
According to the state's Insurance Fraud Division, they've found auto accident victims who falsify or overstate injuries or even fake the accident to achieve a large settlement or award. Those fraudulent claims also have an effect on your bottom line.
"This also has an impact on what you pay for your insurance, just because it drives claim activity," Dubisky said.
Digging through the numbers at the Insurance Fraud Division for the attorney general's office, We found 792 complaints of automobile fraud were filed in 2012 – that's four times more than any other reported fraud. That amounts to $1.2 million.
"We are prosecuting individuals when we find it," Dubisky said. "There is retribution and payments that go back to the perpetrators."
Political officials think the state's law right now is the best way for victims to receive damages.
"It's been weighted between public policy decision-makers that it's better for folks who are not going to commit fraud ,who are trying to file a claim, just to recover their own damages. That this is the best way to make sure they can do that," Dubisky said.
The attorney general's office points out that the average American household pays out more than a $1,000 annually as a result of insurance fraud. The South Carolina Insurance News Service says the limits or what gets settled largely depends on what the limits of the policy include. That means everyone insured could have something different beyond the standard required by the state.