Insurance — Auto – Insolvent Insurer – Guaranty Association – Offset – All Benefits – First Impression

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South Carolina Property & Casualty Insurance Guaranty Association v. Brock (Lawyers Weekly No. 010-122-14, 6 pp.) (Costa Pleicones, J.) Appealed from Charleston County Circuit Court (R. Markley Dennis Jr., J.) S.C. S. Ct.

Holding: When, as here, the South Carolina Property and Casualty Insurance Guaranty Association (Guaranty) must pay the “covered claims” of an insolvent insurer, S.C. Code Ann. § 38-31-100(1) unambiguously allows Guaranty an offset as to all available coverage from solvent insurers, including payments from (a) the liability carrier of the driver of the car in which defendant was a passenger, (b) defendant’s private pay medical insurer, (c) uninsured motorist coverage from defendant’s parents’ carrier, and (d) personal injury protection from defendant’s parents’ carrier.

We affirm in part and reverse in part the circuit court’s ruling that Guaranty was only entitled to offset some of the insurance benefits defendant received from solvent insurers.

Allowing set-off in this case does not offend the collateral source rule because Guaranty is neither a wrongdoer nor the insurer of a wrongdoer. Instead, Guaranty is a statutory entity that exists to provide some protection for the insureds of insolvent insurance companies.

Our reading of § 38-31-100(1) would entitle Guaranty to an offset of the policy limit of $25,000 from the driver’s liability insurance policy rather than the $22,500 that defendant accepted. However, in the circuit court, Guaranty asserted it was seeking to offset only $22,500 in liability coverage and not the full policy limits. Thus, the argument that Guaranty may offset the full $25,000 is not preserved for review.

Affirmed in part, reversed in part.