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by LAURA HUDSON
The cost of all insurance has increased: Homeowners, renters, life, health, long-term care, dental, umbrella, vision, trip, errors and omissions, automobile, wind and hail, flood, boats, burial, etc… Very few citizens are untouched by rising insurance costs.
If one is to believe recent news media headlines, the most egregious insurance cost increase involves policies for establishments which sell alcohol.
During the most recent session of the South Carolina General Assembly, so many meetings were convened on this subject in both the House and Senate one would have thought the world was going to end if a solution for the high cost of insurance for alcohol purveyors wasn’t dealt with. Arguments on the issued dominated debate in the Senate, in particular, during the last few days of the session.
Well, it started again…
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Just two weeks ago, an insurance study committee created by a budget proviso and comprised of House and Senate members, three governor’s appointees (including a plaintiff’s attorney, a defense attorney and an academician) held its first meeting.
Fortunately, senator Brad Hutto of Orangeburg, S.C. – renowned for his legendary ability “cut to the chase” – chaired the panel. His polite understatement concerning S.C. Department of Insurance (SCDOI) Michael Wise’s testimony – “that’s not a consumer-friendly way for us” – was my personal favorite. State representative Micah Caskey‘s remarks were a close second when he pointed out the lack of accurate data and the need for facts.
Last session, we learned that we do not have a clue what criteria insurance companies base their rates on… they refuse to give the state that information.
BUT, if I was an insurance company seeking to enter the South Carolina market, I would examine the following:
- The outrageous statistics of automobile fatalities in South Carolina involving alcohol impairment: Second in nation per miles traveled. If our citizens are overrepresented nationally in losing their lives to alcohol impairment, our citizens are over consuming and being over-served.
- Impaired driving tragedies continue to cause preventable devastation across the United States with 11,654 drunk driving deaths in 2020, a 14 percent increase over the prior year. South Carolina consistently ranks among the nation’s worst states for impaired driving. South Carolina also had a 14 percent in drunk driving deaths (315) from 2019 to 2020. DruFnk driving fatalities were a major factor in 2021, being the deadliest year on South Carolina roads ever.
- South Carolina’s Constitution (Article VIII, Section1) mandates that all alcohol sellers must be engaged “primarily and substantially in the preparation and serving of meals” – which totally eliminates establishments that serve only alcohol. Of course, the fact neither lawmakers nor the courts have ever defined what ‘primarily” or “substantially” means further confuses things. Certainly, the authors of our Constitution didn’t envision that definition including a pack of peanuts or a cellophane-wrapped sandwich from a service station.
- The penalties in the Palmetto State for over-serving an intoxicated person or an underage individual – or serving after hours – have not been raised or adequately enforced by the S.C. Department of Revenue (SCDOR) in the forty years I have been representing driving under the influence (DUI) crime victims.
- The data from both the S.C. State Law Enforcement Division (SLED) and SCDOR needs to be sought by this new study committee: How many violations have been cited? How many have resulted in penalties, suspensions or revocations? How many on-premise licenses are there? And how many of those are new?
- South Carolina’s DUI law is the laughingstock of the nation. Get the statistics on the number of arrests compared to convictions and you’ll see our law is a giant complicated mess with more loopholes and exceptions than a kitchen colander… and more paperwork than an indictment for murder.
- South Carolina also has no data for the number of lawsuits brought on alcohol establishments, the amount collected or the facts presented.
- There is no mandatory alcohol server training in the Palmetto State (senator Luke Rankin has introduced a bill requiring it for three years in a row, but it has failed to clear the S.C. House).
- South Carolina lawmakers seem determined to loosen alcohol laws in every way: Drive up delivery, home delivery, fewer penalties/ laws impossible to enforce.
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Those seeking to remove South Carolina’s requirement for alcohol purveyors to carry a minimum $1 million insurance policy want to tie the state’s joint and several liability law to high insurance rates. Lawmakers have heard facts, however, revealing there is no correlation between joint and several laws and insurance costs in other states.
Establishments that illegally sell alcohol to minors, sell alcohol beyond allowed hours or sell alcohol to intoxicated customers help put drunk drivers on our roads – and put our communities at risk. They are accomplices to the crime of drunk driving.
South Carolina’s current tort laws protect victims by holding those who enable drunk driving fully responsible for harming innocent victims. Proposed changes to those laws – called “tort reform” – would enable these drunk driving accomplices to avoid accountability. They would also shift the costs of their illegal conduct back to the very victims they help create.
In my next column on this issue, I’ll provide some background on those tort laws – including their history, application and impact on victims.
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ABOUT THE AUTHOR …
Laura Hudson is the executive director of the South Carolina Crime Victims’ Council (SCCVC), the chief nonprofit organization in South Carolina advocating the development of crime victims’ rights and services.
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10 comments
The sole purpose of requiring $1 million in liability insurance coverage for bars is to compensate personal injury lawyers, who take between 33% and 50% of every recovery. If the legislature were serious about this, they would limit personal injury lawyers to a contingency fee no more than 20% of the total recovery. But they won’t, because the legislature is controlled by personal injury lawyers whose primary interest is looking out for themselves.
Probably a quicker way to directly impact insurance premiums would be to cap the profits insurance companies are allowed to make and the fees they are allowed to charge. After that, hopefully the government will cap the costs of accountants (mine charges too much), real estate attorneys (my closing fees are ridiculous), and groceries. Price controls are definitely the way to go.
Limit insurance premiums, limit lawyer contingency percentages…
If you’re going to regulate the capitalism out of capitalism, why not just get rid of capitalism?
Facts.
Probably a quicker way to directly impact insurance premiums would be to cap the profits insurance companies are allowed to make and the fees they are allowed to charge. After that, hopefully the government will cap the costs of accountants (mine charges too much), real estate attorneys (my closing fees are ridiculous), and groceries. Price controls are definitely the way to go.
Price controls generally result in supply declines, and thus increased scarcity. This has been copiously documented by economists for many decades, and with real world examples, like Venezuela.
Ah Laura Hudson, the professional hand-wringer who represents at least two major “industries” in our fair state. Those are the “victims’ rights” industry and the DUI industry. In a past life, she was probably a leading member of the Womens’ Christian Temperance Union” or similar amalgamation of meddlesome old hags.
Instead of laying the blame and burdens of DUI tragedies on legitimate businesses and their employees, or the taxpayers in general; why not go after the ones who are truly to blame, the DUI driver? I believe I can answer that.
Because in many cases, the driver who has had too much to drink and causes a tragic accident, in many cases, may not have the proverbial pot to urinate in or the window to throw it out of.
As a sustaining member of the DUI industry, Laura believes that every victim of DUI stupidity is entitled to a deep pocket to pick, even if that deep pocket is not attached to the person really to blame for said accident. So, let’s victimize the bars and restaurants as well as their employees. Methinks it will be a great day for South Carolina when like Katrina Shealy, Laura Hudson retires or is forced by circumstance to step back from “helping victims” by creating more victims from an already bloated legal system.
Indeed, and if a business is making hundreds of thousands (or in some cases millions) of dollars feeding people alcohol, and watching the intoxicated drivers get into their cars, why hold the business financially responsible when they kill an innocent father of 4? After all, it’s important for South Carolinians to have a huge supply of hard liquor. It’s a travesty when people leave bars, and kill innocent people, and then those bars go out of business because of insurance premiums. The widow can always apply for government assistance.
The law is working as it should. If you run a business, and people who consume your products are killing folks, because of the products you sold them, your business should not exist. It’s called an externality. Part of the “cost” of running your business is being born by innocent tax payers. Honestly, if you run a bar, and don’t offer to get an Uber for obviously drunk customers (who you just made money feeding liquor) you should go to prison.
I’m not sure where the idea comes from that South Carolina will be better off with more alcohol sales
Supply? Scarcity? We’re talking about insurance. They aren’t innovating anything. There is no “supply” beyond having enough money to pay claims, and one would think limiting their profits would mean more money can be used for said claims.
I think watching bars and restaurants drop like flies due to some unethical profiteering harms the economy a lot worse than slapping a few hands of some greedy insurance executives who don’t want to put a yacht on a payment plan.
All establishments serving alcohol should be required to carry insurance. All businesses should carry insurance period. It’s all about the money no matter which way you look at it. Hold the person drinking and driving responsible for their actions. Reform is needed for DUI laws as well as the Joint and Several laws