§ 1.9 Delivery of the Policy

• Library: Guide to South Carolina Liability and Property Insurance Law (SCBar) (2019 Ed.)

§ 1.9 Delivery of the Policy

Under South Carolina law, delivery of a policy to the insured is necessary to create a valid insurance policy.¹⁰³ Upon the delivery of the policy, a valid insurance policy is created and South Carolina courts have determined that when such delivery occurs after an insurer has knowledge of a fact that could result in forfeiture of the policy, the insurer could be estopped or have determined to have waived the grounds for forfeiture. The South Carolina Supreme Court specifically explained:

The cases of Gandy v. Ins. Co., 52 S.C. 224, 29 S.E. 655; Pearlstine v. Ins. Co., 74 S.C. 246, 54 S.E. 372; Doyle v. Hill, 75 S.C. 261, 55 S.E. 446; Fludd v. Ass. Soc., 75 S.C. 315, 55 S.E. 762; Rearden v. State Mut. Life Ins. Co., 79 S.C. 526, 60 S.E. 1106, and kindred cases, rest upon the view that if upon the delivery of the policy the insurance company knew of an existing fact constituting ground of forfeiture, the insurance company is estopped to set up such fact against the policy, or is deemed to have waived forfeiture based upon such known fact. Two recent cases, Hankinson v. Piedmont Ins. Co., 80 S.C. 392, and Plunkett v. Piedmont Ins. Co., 80 S.C. 407, 61 S.E. 893, are referred to in McCarty v. Piedmont Ins. Co., 81 S.C. 152, 62 S.E. 1, as being cases in which the knowledge of the agent, which constituted the basis of waiver or estoppel, was as to existing facts inconsistent with the delivery of the policy as a valid contract and as falling within the rule in Gandy's case.¹⁰⁴

In Eaves v. Progressive Fire Insurance Company,¹⁰⁵ the South Carolina Supreme Court determined that per the language of a fire policy, coverage was effective as of the date the policy was delivered. The insured paid the advanced premium and signed an application for the issuance of a fire insurance policy. The agent issued a receipt, which stated "No obligation is incurred by this company by reason of this deposit, unless and until a policy is issued upon said application and delivered to said applicant."¹⁰⁶ The application stated:

I agree that said answers, with this declaration, shall form the basis of a contract of fire insurance * * * and that the policy which may be granted by the said company in pursuance of this application shall be accepted subject to the conditions and agreements contained in such policy. I further agree that no obligation shall exist against said company on account of this application although I may have paid the premiums thereon,

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