A little-noticed provision in S0196 rewrites the rules for public adjusters in South Carolina—and it affects how your business handles insurance claims.
Most auto service shop owners in South Carolina don't realize that a provision buried in S0196 has fundamentally changed how public adjusters can be compensated for handling insurance claims. If your business has ever hired a public adjuster to negotiate a settlement after a major loss, or if you're considering it, this matters.
South Carolina's S0196 introduced a hard cap on public adjuster fees: 10 percent of any insurance settlement, with no exceptions. That's the ceiling. But there's more. The law also prohibits public adjusters from collecting upfront retainers or deposits before a claim is actually settled. In plain terms: they can't ask for money up front, and they can't take more than one dime of every dollar recovered.
This provision is codified in Section 38-92-120(E) under Chapter 92 of South Carolina's insurance code.
If your auto service business operates as a licensed public adjuster, this directly limits your revenue model. If you hire public adjusters to handle claims on behalf of your business, this creates a cost floor—you now know exactly what the maximum fee exposure will be.
The prohibition on upfront deposits is particularly significant. Previously, some public adjusters might have requested retainers to cover work before settlement. That's no longer allowed. Payment flows only after the claim is resolved.
For shop owners evaluating whether to hire a public adjuster for a significant claim, the 10 percent cap removes one variable from your cost calculation. You won't face surprise fees or escalating charges as negotiations drag on. The fee is capped by law.
For public adjuster businesses, the provision creates a predictable but constrained revenue model. Complex claims that require extensive investigation and negotiation still generate the same 10 percent fee as simpler ones. Profitability depends on volume and efficiency.
The no-upfront-deposit rule also shifts cash flow dynamics. Public adjusters must now fund their own work until settlement, which changes how they manage resources and which claims they take on.
S0196 became effective upon approval by the Governor, as stated in Section 6 of the bill. This means the 10 percent cap and deposit prohibition are already in force.
If your business currently works with public adjusters or is considering hiring one, review your existing agreements to ensure they comply with the 10 percent cap. If you operate as a public adjuster yourself, audit your fee structures and client contracts to confirm alignment with the new law.
The provision is straightforward in language but significant in impact. Understanding it protects your business from compliance issues and helps you make informed decisions about claim management.
For a detailed, business-specific breakdown of how S0196 applies to your operation, resources are available through South Carolina's Department of Insurance and industry trade associations serving the auto service sector.