Subcommittee adopts notice requirement for earthquake coverage; sets implementation date to Jan. 1, 2027

Representative Gatch told the subcommittee H.3227 is intended to inform consumers that earthquake coverage is available and what it would cost, not to mandate coverage. “It's, if it's offered, you you can get it … what I'm asking them to do is that if they do offer it, that they would basically just let the potential client … know that, hey, we live in a high earthquake area,” Gatch said.

Tom Selaney of USAA said his company had no objection to a notice amendment but urged insurers be given time to implement system and printing changes. "That doesn't give enough lead time to insurers to be able to change their computers, get the process going," Selaney said, recommending a delayed implementation so new and renewal policies receive appropriate notice. Jeff Thorold of the South Carolina Insurance Association echoed appreciation for the amendment and noted the effective‑date issue remained a concern for industry operations.

Committee member Mr. Smith offered a strike‑all amendment that requires insurers to communicate in at least 10‑point bold type that a residential policy does not provide earthquake coverage and to tell insureds how to inquire about options. The subcommittee also adopted a second amendment setting the effective date to Jan. 1, 2027. Both amendments passed by voice vote, and the chair announced the bill, as amended, will go to the full committee.

Witnesses discussed geographic rate variability (rates may differ for Summerville versus mountain areas) and whether the notice would drive insurers out of the market; industry witnesses said USAA offers earthquake endorsements and that implementation will add administrative work but is unlikely to cause USAA to withdraw from the state.

The subcommittee’s action sends the amended bill to the full committee for further consideration.