S.C. Code Ann. § 38-59-40
South Carolina Code of Laws (Unannotated), Title 38 (Insurance), Chapter 59 (Claim Practices). Text fetched from the South Carolina Legislature’s official site (scstatehouse.gov) on August 6, 2026. This is the statutory remedy provision of Chapter 59: if the insurer refuses to pay a covered claim within 90 days after demand and the trial judge finds the refusal was without reasonable cause or in bad faith, the policyholder recovers reasonable attorney’s fees (capped at one-third of the judgment) on top of everything else recoverable. Subsection (3) expressly preserves the Tyger River doctrine — South Carolina’s foundational bad-faith case law — so this statute adds to, and does not replace, the common-law bad faith action.
Statutory text
(1) In the event of a claim, loss, or damage which is covered by a policy of insurance or a contract of a nonprofit hospital service plan or a medical service corporation and the refusal of the insurer, plan, or corporation to pay the claim within ninety days after a demand has been made by the holder of the policy or contract and a finding on suit of the contract made by the trial judge that the refusal was without reasonable cause or in bad faith, the insurer, plan, or corporation is liable to pay the holder, in addition to any sum or any amount otherwise recoverable, all reasonable attorneys’ fees for the prosecution of the case against the insurer, plan, or corporation. The amount of reasonable attorneys’ fees must be determined by the trial judge and the amount added to the judgment. The amount of the attorneys’ fees may not exceed one-third of the amount of the judgment.
(2) If attorneys’ fees are allowed and, on appeal by the defendant, the judgment is affirmed, the Supreme Court or the court of appeals shall allow to the respondent an additional sum as the court adjudges reasonable as attorneys’ fees of the respondent on the appeal.
(3) Nothing in this section may be construed to alter or affect the Tyger River Pine Co. v. Maryland Casualty Co., 161 SE 491, 163 SC 229, doctrine.
(4) This section applies to cases filed or removed to federal court and cases appealed in the federal court system.
HISTORY: Former 1976 Code SECTION 38-9-320 [1962 Code SECTION 37-167.1; 1972 (57) 2203] recodified as SECTION 38-59-40 by 1987 Act No. 155, SECTION 1; 1989 Act No. 148, SECTION 50; 1999 Act No. 55, SECTION 38.
Related authorities
South Carolina
sc-code-38-48-public-adjusters-chapter.md— S.C. Code §§ 38-48-10 to 38-48-160 (public adjuster licensing chapter)sc-code-38-59-20-improper-claim-practices.md— S.C. Code § 38-59-20 (improper claim practices)sc-code-38-59-30-improper-claims-penalties.md— S.C. Code § 38-59-30 (Director’s enforcement and penalties for improper claim practices)sc-code-38-75-20-valued-policy-total-fire-loss.md— S.C. Code § 38-75-20 (valued-policy rule: total fire loss pays full amount of insurance)- Case shelf:
../cases/sc-case-tyger-river-pine-1933-bad-faith-foundation.md— Tyger River Pine Co. v. Maryland Cas. Co., 170 S.C. 286 (1933), the doctrine preserved by subsection (3)
Georgia
ga-ocga-33-4-6-bad-faith-penalty.md— O.C.G.A. § 33-4-6 (first-party bad faith penalty)ga-ocga-33-4-7-motor-vehicle-bad-faith.md— O.C.G.A. § 33-4-7 (third-party motor vehicle bad faith)ga-ocga-33-6-34-unfair-claims-settlement-practices.md— O.C.G.A. § 33-6-34 (unfair claims settlement practices)ga-ocga-33-23-43-who-may-adjust-claims.md— O.C.G.A. § 33-23-43 (who may adjust claims; prohibited conduct)ga-ocga-33-23-43-1-public-adjuster-license-required.md— O.C.G.A. § 33-23-43.1 (public adjuster license required)ga-ocga-33-23-43-2-public-adjuster-contracts.md— O.C.G.A. § 33-23-43.2 (public adjuster contract requirements)ga-ocga-33-23-43-3-public-adjuster-fee-cap.md— O.C.G.A. § 33-23-43.3 (public adjuster fee cap, 33.3%)ga-ocga-10-1-393-12-residential-roofing-contracts.md— O.C.G.A. § 10-1-393.12 (residential roofing contracts, FBPA)ga-reg-120-2-52-03-claim-handling-deadlines.md— Ga. Comp. R. & Regs. 120-2-52-.03 (claim-handling deadlines)
Tennessee
tn-code-56-6-913-public-adjuster-fee-caps.md— Tenn. Code Ann. § 56-6-913 (public adjuster fee caps)tn-code-56-7-105-bad-faith-penalty.md— Tenn. Code Ann. § 56-7-105 (bad faith 25% penalty)tn-code-56-8-105-unfair-claims-practices.md— Tenn. Code Ann. § 56-8-105 (unfair claims practices)tn-rule-0780-01-91-public-adjusters.md— Tenn. Comp. R. & Regs. ch. 0780-01-91 (public adjusters rule)
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