South Carolina Supreme Court Says that PIP Cannot Be Offset by Workers’ Compensation Benefits

In many South Carolina car accident cases, there is only one real issue: the amount of damages to which the injured party is entitled to receive from the at-fault defendant’s motor vehicle liability insurer.

Sometimes, however, there are other issues, such as how the payment of benefits under other insurance policies – including workers’ compensation insurance, personal injury protection, etc. – factor into the equation. When such dispute cannot be settled among the parties, it is up to the courts to decide.

Facts of the Case

In a recent case, the plaintiff was a woman who was reportedly injured in a work-related motor vehicle accident. Her employer’s workers’ compensation insurance carrier paid some $40,000 in medical expenses related to the accident. After the defendant automobile accident insurance company refused to pay the plaintiff’s personal injury protection (PIP) limit of $5000, the plaintiff and her husband filed suit, asserting claims for breach of contract and bad faith refusal to pay insurance benefits.

The Spartanburg County Circuit Court granted summary judgment to the plaintiffs on their breach of contract claim, holding that a certain “coordination” provision of the automobile accident insurance policy was in violation of South Carolina Code § 38-77-144. The defendant appealed, and the South Carolina Court of Appeals reversed. The plaintiffs sought further review from the state’s highest court.

Decision of the Court

The South Carolina Supreme Court reversed the lower court’s ruling and reinstated the lower tribunal’s entry of summary judgment in favor of the plaintiffs. Under § 38-77-144, PIP coverage cannot be assigned or subrogated, nor is it subject to a setoff. Noting that the term “setoff” was not defined in the South Carolina Insurance Code, the court applied the term’s usual meaning in the legal sense: a reduction in the amount that a defendant or insurance company would otherwise be obligated to pay on a claim due to a payment from a third party.

According to the court, the legislature’s intention – at least partially – was to prevent an insurance company like the defendant from reducing the amount of PIP coverage that it paid the insured simply because the insured received a payment from a third party for the same expenses. In the court’s view, if the defendant’s “coordination” provision had this effect, then it was a “setoff” and hence in violation of § 38-77-144. In so holding, the court noted that, while both workers’ compensation insurance and the plaintiff’s automobile policy in the case at bar were “no-fault,” the automobile insurance policy was considered “first-party” insurance.

South Carolina Car Accident Attorney Here to Answer Your Questions

The Patrick E. Knie Law Offices handles South Carolina car accident cases, and many different types of personal injury and wrongful death lawsuits, including claims involving truck wrecks, and motorcycle crashes. We also advocate for those who believe their insurance company has failed to act in good faith in settling a claim. To schedule a free consultation to learn more about our firm, our experience, and our services, call us now at 864-582-5118. We represent clients in Spartanburg, Greenville, and the surrounding areas. There is no charge for the appointment, and no legal fees are owed until we cover a money judgment or settlement on your behalf.

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