Opinion ID: 1258773
Heading Depth: 3
Heading Rank: 3

Heading: Other Insurance Clause Conflict with Statutory Law

Text: Finally Blanding claims, even if the policies did cover the same risks, interests, and insureds during the same period of time, the other insurance clause in the American Security policy conflicts with statutory law and is therefore invalid. Specifically, Blanding points to sections 38-75-20 and XX-XX-XXX of the South Carolina Code of Laws in support of this argument. Section 38-75-20 provides in pertinent part: No insurer doing business in this State may issue a fire insurance policy for more than the value stated in the policy or the value of the property to be insured.... If two or more policies are written upon the same property, they are considered to be contributive insurance, and, if the aggregate sum of all such insurance exceeds the insurable value of the property, as agreed by the insurer and the insured, each insurer, in the event of a total or partial loss, is liable for its pro rata share of insurance. S.C.Code Ann. § 38-75-20 (2002). Section 38-75-220 provides in part: No insurer transacting a mobile home insurance business in this State and writing hazard insurance covering loss from physical damage to the mobile homes may issue a policy for more than the value stated in the policy or the value of the property to be insured.... If two or more such policies are written upon the same property and covering the same interests, they are considered to be contributive insurance, and, if the aggregate sum of all such insurance exceeds the insurable value of the property, as agreed by the insured and insurer, each insurer, in the event of a total or partial loss, is liable for its pro rata share of insurance. S.C.Code Ann. § 38-75-220 (2002). Blanding argues, to the extent the two policies in question cover the same interests, the other insurance clause in the American Security policy is invalid because it conflicts with sections 38-75-20 and 38-75-220 of the South Carolina Code. She argues under these sections such policies are deemed to be concurrent and contributive as a matter of law, and as such, each insurer is primarily liable for its pro rata share of the loss to the extent the aggregate sum of insurance exceeds the insurable value of the property. Again, we disagree. [I]f policies insure the same entity and interest against the same casualty, then the coverage provided by the policies is concurrent, thus requiring pro rata contribution absent a contrary provision in an `other insurance' clause contained in one of the policies. S.C. Ins. Co. v. Fid. & Guar. Ins. Underwriters, Inc., 327 S.C. 207, 214, 489 S.E.2d 200, 203 (1997) (emphasis added). Here, the American Security policy contains an other insurance clause that provides [i]f there is any other valid or collectible insurance which would attach if the insurance under this policy had not been effected, this insurance shall apply only as excess and in no event as contributing insurance and then only after all other insurance has been exhausted. Thus, the policy language clearly provides to the contrary and the coverage provided by the policy is not concurrent and contributive as a matter of law.