A hard 10% fee ceiling and upfront payment ban in South Carolina's insurance adjuster bill affects how small businesses can hire claim help.
Most South Carolina small business owners don't realize that if they hire a public adjuster to help settle an insurance claim—or if they operate as one—a new state law has placed a strict cap on how much can be charged.
Bill S0196, which became law upon the Governor's approval, inserted a provision into South Carolina's insurance code that directly limits public adjuster compensation. Here's what it means in plain terms.
Under Section 38-92-120(E) of the bill, public adjusters in South Carolina are now prohibited from charging more than 10% of any insurance settlement they help secure. That's a hard ceiling—no exceptions for complex claims, multiple policies, or extended negotiations.
Equally important: public adjusters cannot collect upfront retainers or deposits before a claim is settled. This means no advance fees, no down payments, and no payment until money actually arrives from the insurance company. The adjuster's entire compensation depends on settlement success and is capped at that 10% threshold.
If you operate a public adjuster business in South Carolina, this provision directly constrains your revenue model. A 10% fee ceiling means your compensation is fixed regardless of claim complexity, the time invested, or the negotiation difficulty. You cannot offset lower settlement amounts with higher percentages or recover costs through upfront fees.
If you're a small business owner considering hiring a public adjuster, this provision works in your favor: it sets a legal maximum you'll pay and eliminates the risk of paying someone before your claim is resolved.
Insurance brokers, agents, and business consultants who refer clients to public adjusters should also understand this rule, since it affects what you can promise clients about adjuster costs.
The provision became effective upon the Governor's approval of S0196. There is no delayed implementation period. The rule applies to all public adjuster agreements entered into after the bill's approval.
The specific legal language is found in Section 38-92-120(E) of South Carolina's insurance code, as amended by S0196.
For public adjusters: your business model must operate within a 10% contingency fee structure with zero upfront revenue. This affects pricing strategy, client selection, and cash flow planning. You cannot negotiate higher percentages or collect deposits to manage working capital.
For small business owners: when evaluating whether to hire a public adjuster, you now have a transparent, legally enforced cost ceiling. Your maximum expense is 10% of the settlement amount, and you pay nothing until the claim is resolved.
For all professional service providers advising small businesses: understanding this cap helps you guide clients toward or away from public adjuster services based on their claim size and complexity, since the fee structure is now uniform across the state.
For a detailed breakdown of how S0196 affects your specific business model, contact your state trade association or insurance professional advisor.