In the “Palmetto” state, if you ever have difficulty finding auto insurance - such as due to a history of traffic accidents or motor vehicle violations - you can turn to the Associated Auto Insurers Plan of South Carolina (AAIPSC) for coverage. South Carolina is one of the few states where you can legally drive without auto insurance. However, if you choose to drive uninsured, you still have to pay an annual $550 fee to the SC Department of Public Safety, and carry proof that you have permission to drive this way. Also, if you are in an accident, you may be required to personally pay the full cost for any injuries and damages you cause.
What is the Associated Auto Insurers Plan of South Carolina – AAIPSC?
In 1999, the state of South Carolina completely revamped the way it handles auto insurance for all drivers. It eliminated mandatory liability insurance and got rid of the South Carolina Reinsurance Facility, which used to write insurance for high risk drivers. Instead it created the Associated Auto Insurers Plan of South Carolina for drivers, which aims to serve those with a less-than-perfect record.
AAIPSC is not an insurance company, but is an entity that assigns high risk drivers to existing auto insurance companies in the state, based on their share of the auto insurance market. All auto insurers who want to do business in the state must agree to accept assignments from AAIPSC. So for example, if Nationwide Insurance has 9% of the overall auto insurance market in South Carolina, then it must cover 9% of the high risk drivers in the state.
If you land in the AAIPSC pool, you WILL get coverage, but according to the South Carolina Department of Insurance, you will pay higher rates than you would find in the “voluntary” market. “Voluntary” is the insurance industry term for the “regular” market, where safer drivers pay lower premiums because overall, their claims are fewer and their losses are lower. The rates charged through AAIPSC are designed to cover the losses of the high risk drivers it insures.
In order to apply for insurance through the AAIPSC, you must have a valid driver’s license and a car registered in South Carolina. You also need to say on your application that you have tried and failed to find insurance in the voluntary market within the past two months. If you’ve been turned down, you have to give the reason(s) why on your application.
There are a couple of circumstances ou may NOT be able to get coverage – even through the AAIPSC: if your license has been suspended or revoked, or if you have failed to pay an auto insurance premium. You may also be denied if the insurance company determines that the information on your application is fraudulent, even if it was an accidental omission. Work with your insurance agent to complete the application accurately.
Drivers who get insurance through the AAIPSC receive the same coverages as safer drivers – they just may cost more. The minimum car insurance coverages are $25,000/$50,000 for Bodily Injury and $25,000 for Property Damage, as well as Uninsured Motorists coverage of 25/50/25 with a $200 deductible on your Uninsured Motorists Property Damage coverage. You may want a higher coverage limit than what your assigned insurer is required to make available to you (see table below), but your insurer does not have to provide it to you.
The table below shows what the minimum and maximum coverage amounts (limits) you can find through the plan:
|Mandatory Coverage (after first accident)||South Carolina Min. Required Limits||AAIPSC Max. Limits|
|Bodily Injury (BI)||$25,000 per person / $50,000 per accident||$250,000 per person / $500,000 per accident|
|Property Damage (PD)||$25,000 per accident||$100,000 per accident|
|Uninsured Motorist BI (UMBI)||$25,000 per person / $50,000 per accident||as high as but no higher than your BI limits|
|Uninsured Motorist PD (UMPD)||$25,000 per accident with $200 deductible||as high as but no higher than your PD limits, with $200 deductible|
In addition, your insurer may offer you the optional coverages shown below, for an additional premium. Note that insurers must offer you the chance to purchase “Underinsured Motorist” coverage, but you are not obligated to. Whenever you choose to buy either Collision or Comprehensive coverage, you will be asked to choose a deductible amount from among these choices: $50 (Comprehensive only), $100, $200, $250, $500, $1,000, $2,000, and $5,000. You are responsible for shouldering the deductible amount you choose out-of-pocket before your assigned insurer comes in to pay the rest (except for windshield repair claims).
|Optional Coverage||AAIPSC Min. Limits||AAIPSC Max. Limits|
|Medical Payments (MED)||$1,000 per person per accident||$5,000 per person per accident|
|Underinsured Motorist||25/50/25||as high as but no higher than your BI/PD limits|
|Physical Damage (collision and comprehensive)||Actual cash value of your car||actual cash value|
Once you are assigned an insurer, you will be covered for up to 3 years. This is a good time to work on improving your driving record in order to become eligible for insurance coverage in the voluntary market. If you do become a safer driver and succeed in finding insurance coverage at a better price, you are free to switch to a different company, once you notify the AAIPSC of who the new insurer is. Your assigned insurer should refund the balance of your premium payments, with no penalty.
If at the end of 3 years you are still considered “high risk,” you may reapply to the AAIPSC for coverage and be considered a “new applicant.” This means you will likely be assigned to a new insurer.
AAIPSC Premiums and Payments
The South Carolina Department of Insurance says that drivers insured through the AAIPSC are likely to pay higher auto insurance rates than safer drivers do. But because insurance companies are free to use their own underwriting criteria and set their own rates, there is no “magic formula” for determining how much higher your rates will be. Insurance premiums are generally set based on a number of factors. The more you understand what those factors are, the more you can take action over time to reduce your premiums and get back to the voluntary market.
South Carolina offers 3 basic ways to pay your auto insurance premiums. These are:
- Pay the full annual premium up front, when you submit your application.
- Pay a deposit of 30% of the annual premium along with your application, and pay the remaining balance within 30 days.
- Pay a deposit of 40% of the annual premium and pay the remainder in 5 monthly installments. There is a $4 service charge added to each of the installment payments.
Remember that there is no “grace period” when it comes to paying your auto insurance premiums. If you miss a payment date, you will likely receive a notice cancellation of your policy within a matter of days. And if your policy is cancelled, that “failure to pay” history is kept for 3 years and can interfere with getting insurance coverage in South Carolina in the future. As difficult as it may be, we urge drivers to do their best to stay current.
How Do I Get Insurance through the AAIPSC?
Insurance companies and agents in South Carolina must get certified to write auto insurance through the AAIPSC. To find a licensed agent near you, call the AAIPSC at 866-560-4100.