Informational only — not legal advice. Laws and case precedent change, and outcomes depend on your specific policy language. Verify current law with your state Department of Insurance or a qualified attorney before relying on it.
Can insurers depreciate labor when calculating ACV?
PermittedSouth Carolina permits carriers to depreciate labor when calculating actual cash value under a policy that does not define ACV. That includes labor embedded in the cost of installed materials. Expect labor depreciation on the ACV check and recover it through the recoverable-depreciation claim after the work is complete.
Authority
Butler v. The Travelers Home & Marine Ins. Co., Op. No. 28026, 858 S.E.2d 407 (S.C. May 12, 2021), answering a certified question from the U.S. District Court for the District of South Carolina (Appellate Case No. 2020-001285). The South Carolina Supreme Court held that an insurer using the replacement-cost-less-depreciation method may depreciate the labor component where the policy leaves "actual cash value" undefined. The holding permits labor depreciation as a method; whether a particular depreciation amount is correct remains a question of fact.
Related: RCV vs. ACV and recoverable depreciation, explained · Xactimate RFG vs. DMO labor — pricing removal correctly
Must insurers replace undamaged materials so the repair matches?
UnsettledSouth Carolina has no matching, line-of-sight, or uniform-appearance requirement in statute, regulation, or bulletin, and no controlling appellate decision requiring a carrier to replace undamaged slopes or siding for appearance. Whether the carrier pays to match turns entirely on the policy language, usually the promise to repair or replace with material of like kind and quality. Build the matching argument from that wording and, on a replacement-cost policy, from the pre-loss-condition standard.
Authority
S.C. Code Ann. Title 38, Ch. 59, §§ 38-59-10 through 38-59-270 govern claims practices and contain no matching, line-of-sight, or reasonably uniform appearance provision. The Department of Insurance regulations at S.C. Code of Regs. Ch. 69 contain no matching rule, and the Department has issued no bulletin on the question. With no statutory or regulatory mandate, the obligation is contractual. Carriers routinely take the position that no matching duty exists absent a specific endorsement.
S.C. Code Ann. Title 38, Ch. 59 — Claims Practices (scstatehouse.gov) — primary statute; contains no matching provision · S.C. Code of Regulations, Chapter 69 — Department of Insurance (scstatehouse.gov) — primary regulation; no matching rule · South Carolina Department of Insurance — Bulletins index (dc.statelibrary.sc.gov)
Related: The line items adjusters miss on a roof claim · How to fight a lowball insurance estimate
Can a contractor pay or waive the homeowner's deductible?
ProhibitedSouth Carolina bans deductible rebating by statute, and the ban reaches the advertising as well as the act. You may not promise to pay, absorb, waive, or rebate any part of a homeowner's insurance deductible as an inducement to buy your services, and you may not advertise that you will. The lawful path is to bill the carrier the price you actually charge and let the homeowner pay the deductible, financing it over time if they need to.
You may
- Bill the carrier the price you actually charge and collect the deductible in full
- Offer a payment plan so the homeowner can pay the deductible over time
- Refer the homeowner to third-party financing for their out-of-pocket share
- Give a genuine, disclosed discount off your real price, understanding the carrier then pays proportionally less
- State plainly in writing that the deductible is the homeowner's responsibility
You may not
- Promise to pay, absorb, waive, or rebate any part of the deductible
- Advertise "we cover your deductible," "no out-of-pocket," or "free roof"
- Grant an allowance or discount against your fee in exchange for a yard sign
- Pay the insured any compensation, gift, credit, or referral fee that offsets the deductible
- Inflate the estimate to the carrier to build the deductible back into the job
Penalty: A violation is a misdemeanor and is grounds for suspension or revocation of the license.
Authority
S.C. Code Ann. § 40-59-25(E)(1) provides that a builder or contractor shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services. § 40-59-25(E)(3) defines "promise to pay or rebate" broadly to include granting an allowance or discount against the fee, including for displaying a sign, and paying the insured any compensation, gift, credit, or referral fee. § 40-59-25(E)(2) sets the misdemeanor penalty and license suspension or revocation.
Related: RCV vs. ACV and recoverable depreciation, explained
Can a contractor negotiate the homeowner's claim?
ProhibitedSouth Carolina bars a contractor from representing or negotiating a residential roof insurance claim on the homeowner's behalf, and from offering or advertising to do so, even for free. The statute expressly preserves your right to evaluate the roof and for the homeowner to use your evaluation in the negotiation. You may work your estimate; the homeowner, a licensed public adjuster, or an attorney must work the claim.
You may
- Inspect the roof and document the damage
- Write and submit your scope, estimate, and supplements for your own work
- Explain and justify your line items and pricing to the adjuster
- Meet the adjuster on the roof and answer questions about your evaluation
- Give the homeowner a written evaluation of the roof's condition to use in their negotiation
- Recommend that the homeowner file a claim
You may not
- Represent or negotiate the claim on the homeowner's behalf
- Offer or advertise to represent or negotiate a roof claim
- Advertise "we handle your claim" or "we negotiate with your adjuster"
- Advise the homeowner on policy coverage or interpret the policy for them
- Act as both the contractor and the public adjuster on the same claim
- Take a power of attorney or assignment to speak for the insured on the settlement
Penalty: A § 40-59-25 violation is misconduct grounding license revocation, suspension, or restriction, with a fine up to $2,500 per offense, and a knowing violation is a misdemeanor punishable by up to $1,000 or up to two years; acting as both contractor and public adjuster on the same claim is a felony punishable by a fine in the court's discretion or up to two years' imprisonment.
Authority
S.C. Code Ann. § 40-59-25(D)(1) provides that a builder or contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of residential real estate on any insurance claim in connection with the repair or replacement of roof systems. § 40-59-25(D)(2) preserves the evaluation: notwithstanding item (1), an owner is not prevented from consulting a builder, contractor, or other person of his choice to provide an evaluation of the condition of his roof system and using that evaluation in the negotiation for repair or replacement. The related deductible-rebate ban sits at § 40-59-25(E). Penalties run through § 40-59-110 (misconduct; revocation, suspension, or restriction of license), § 40-59-120 (fine up to $2,500 per offense, in addition to § 40-1-120 actions), and § 40-59-200 (knowing violation of the article is a misdemeanor). On the adjuster side, § 38-48-10 defines a public insurance adjuster as an individual who for compensation engages in public adjusting, § 38-48-20 requires a license to adjust losses for an insured, and § 38-48-130(d) makes it unlawful to act as both a contractor and a public adjuster in the adjustment of a claim for an insured, a felony under the section's closing penalty sentence.
S.C. Code Ann. Title 40, Ch. 59 — Residential Builders (§ 40-59-25(D)(1) roofing claim representation/negotiation ban; § 40-59-25(D)(2) evaluation carve-out; §§ 40-59-110, 40-59-120, 40-59-200 penalties) — official SC State House Code of Laws · S.C. Code Ann. Title 38, Ch. 48 — Public Insurance Adjusters (§ 38-48-10 definitions; § 38-48-20 license required; § 38-48-130(d) contractor-and-public-adjuster bar with felony penalty) — official SC State House Code of Laws · South Carolina Department of Insurance — regulator administering public adjuster licensing under Title 38, Ch. 48
Related: What is a roofing supplement? · How to fight a lowball insurance estimate
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