Indicates Matter Stricken

Indicates New Matter

 

Committee Report

February 19, 2026

 

H. 3227

 

Introduced by Rep. Gatch

 

S. Printed 2/19/26--H.

Read the first time January 14, 2025

 

________

 

The committee on House Labor, Commerce and Industry

To whom was referred a Bill (H. 3227) to amend the South Carolina Code of Laws by adding Section 38-75-70 so as to require insurers to offer insurance coverage for loss or damage resulting from an earthquake, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

 

   Amend the bill, as and if amended, SECTION 1, by striking Section 38-75-70 and inserting:

    Section 38-75-70.  (A) No policy for residential property insurance may be issued, delivered, or renewed in this State unless the named insured is offered coverage for loss or damage caused by an earthquake.

    (B) Insurance coverage for loss or damage caused by an earthquake may be provided in the policy of residential property insurance itself, either by specific policy provision or endorsement, or in a separate policy or certificate of insurance which specifically provides coverage for loss or damage caused by an earthquake.

    (C) The offer of insurance coverage for loss or damage caused by an earthquake must contain all of the following language in at least ten point boldface type: "Your residential property insurance policy does not cover loss or damage caused by an earthquake to your home or its contents."

    (D) If an insured elects to decline coverage, the insured must sign a waiver, provided by the insurer, which expressly states that the insured is declining coverage for loss or damage caused by an earthquake.If an insurer issues a policy or contract of insurance covering residential property in this State that does not provide coverage for a loss as a result of an earthquake, this must be communicated to the insured at the time of policy issuance and each subsequent renewal. The communication must be in at least ten point boldface type and contain the following language, or something similar: "This residential property insurance policy does not provide coverage for losses as a result of an earthquake. Please contact your insurance agent or insurance carrier to inquire about options to cover a loss resulting from an earthquake."

Amend the bill further, SECTION 2, by striking Section  and inserting:

SECTION 2.  This act takes effect upon approval by the Governoron January 1, 2027.

Renumber sections to conform.

Amend title to conform.

 

WILLIAM HERBKERSMAN for Committee.

 

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This bill requires all residential property insurance policies issued, delivered, or renewed in the state to offer the policyholder coverage for loss or damage caused by an earthquake. The bill provides that the earthquake coverage may be provided in the policy of residential property insurance, either by specific policy provision or endorsement, or in a separate policy or certificate of insurance. The bill specifies language that must be provided in the offer of earthquake insurance to the insured, and if the coverage is declined, requires the insured individual to sign a waiver provided by the insurer expressly declining the coverage.

This bill will have no impact on DOI, as the agency indicates that it will oversee the bill's implementation with existing staff and resources.

 

State Revenue

This bill's requirement of express notice of earthquake coverage and waiver requirement if the coverage is declined may result in more homeowners electing to obtain earthquake insurance coverage as part of their residential property policy, which may increase homeowners' insurance premiums and may subsequently increase insurance premiums tax revenue.

Currently, premiums received by an insurance company for property and casualty insurance policies, including residential property insurance, are subject to a state insurance premiums tax of 1.25 percent, of which 2.25 percent is distributed to Other Funds and 97.75 percent is distributed to the General Fund. Any increase in premiums tax revenue will depend on the change to premiums due to this bill. As the increase in insurance premiums is unknown, the increase to General Fund and Other Fund revenues is undetermined.

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

_______

 

 

 

 

 

 

 

 

A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 38-75-70 SO AS TO REQUIRE INSURERS TO OFFER INSURANCE COVERAGE FOR LOSS OR DAMAGE RESULTING FROM AN EARTHQUAKE TO ALL POLICIES ISSUED IN THIS STATE.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Article 1, Chapter 75, Title 38 of the S.C. Code is amended by adding:

 

    Section 38-75-70.  (A) No policy for residential property insurance may be issued, delivered, or renewed in this State unless the named insured is offered coverage for loss or damage caused by an earthquake.

    (B) Insurance coverage for loss or damage caused by an earthquake may be provided in the policy of residential property insurance itself, either by specific policy provision or endorsement, or in a separate policy or certificate of insurance which specifically provides coverage for loss or damage caused by an earthquake.

    (C) The offer of insurance coverage for loss or damage caused by an earthquake must contain all of the following language in at least ten point boldface type: "Your residential property insurance policy does not cover loss or damage caused by an earthquake to your home or its contents."

    (D) If an insured elects to decline coverage, the insured must sign a waiver, provided by the insurer, which expressly states that the insured is declining coverage for loss or damage caused by an earthquake.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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